Jail fees, taxes lift county's revenue

Pulaski County increased its revenue in 2015 by nearly $2.5 million, most of which is attributable to an increase in reimbursements made by the state for holding inmates in the county jail.

Total revenue was more than $68.4 million for 2015, up from almost $66 million in 2014.

Reimbursements for 2015 totaled $4 million, an increase of nearly $1.8 million from 2014. It was the second-straight year in which reimbursement totals nearly doubled from the previous year.

Pulaski County Sheriff Doc Holladay said the number of state inmates held in the jail is declining but added that the county is still owed $1.8 million for holding inmates during the four-month period from August through November. The county last received payment from the state -- a $421,788 check -- in November for inmates held in July.

Holding state inmates is expected to be less of a source of revenue as the number of state inmates housed in the jail continues to drop.

"We're in much better shape than we were a year ago," Holladay said.

In January 2015, the county averaged 226 inmates awaiting transfer to a state facility each day. That doesn't include holds for parole, parole violators or Arkansas Department of Community Correction holds. In December, the county averaged 135 each day.

Previously, the Arkansas Department of Correction paid $28 per day per inmate held in the jail after 30 days of being sentenced to prison. That payment increased to $30 per day, per the state budget passed by the Arkansas Legislature. The increase took effect in July. The county has estimated it costs more than $40 per day to hold a state inmate.

Another law passed in 2015 requires the Department of Correction to reimburse counties for state inmates' medical care.

The county's revenue increase was also helped by $661,159 in property tax growth and $392,254 in sales and use tax growth. Sales and use tax revenue grew at a rate of 3.9 percent from 2014 to 2015, trumping previously flat growth and sometimes declines in previous years.

"The economy is doing better," county Comptroller Mike Hutchens said. "It's that simple. More people are out spending money."

In 2015, Pulaski County's sales and use tax revenue, which comes from statewide revenue apportioned to counties and cities, eclipsed $10 million for the first time since 2010, when it was $11.2 million. Between 2010 and 2011, sales and use tax revenue dropped 12 percent to $9.8 million. The next year it increased 0.8 percent, then it dropped 0.2 percent from 2012 to 2013, then increased 1.1 percent from 2013 to 2014. City and county officials often hope for an annual increase in tax revenue of about 3 percent.

While the county increased its revenue significantly in reimbursements and the two taxes, it lost revenue in some smaller areas.

The county dramatically lost revenue from 911 fees, from $133,450 to $61,048, a much sharper decline than previous years. Revenue declined by less than $10,000 between 2012 and 2013 and again between 2013 and 2014. The declines are mostly due to people getting rid of landlines, which contribute to the 911 fee, Hutchens said. A separate fund for 911 service comes from cellphone fees that don't end up in the county general fund and wouldn't be reflected in a county revenue report.

Pulaski County also took in $44,119 in payments in lieu of taxes in 2015, a far cry from the $377,877 it collected in 2014, but officials and data indicate those payments are in flux each year.

An agreement for payment in lieu of taxes is when a company agrees with local government not to pay property taxes and to pay a smaller fee instead. The agreements are often entered as an incentive to businesses when they are planning to expand.

Metro on 01/31/2016

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