In less than two weeks, the 1-cent IRS tax falls off, and the total tax rate dips to 9.75 percent.
The sales tax decrease will provide a little relief to Blytheville patrons, who will now pay a 1.25 percent city rate and continue to pay a 2 percent county tax and 6.5 percent state rate.
Even when the 1-cent tax drops off the books, monies will still trickle into city coffers over the next couple of months because of the collection process.
No matter how one feels about the tax, in the end it allowed the city to clear a major financial hurdle, to put it mildly, and avoid any losses of city services.
When initially proposed, the tax seemed a long shot to win approval, but Mayor James Sanders and all those who campaigned for it were successful in overcoming the naysayers and pulling the city out of perhaps the biggest financial crisis in its history.
Now the IRS debt is basically in the rearview mirror and Blytheville has the opportunity to move forward. The biggest lingering issue is what will come of any surplus funds from the tax.
According to the Finance Committee chairman, Councilman Tommy Abbott, by the end of November, the city will have paid $3,659,566.54 to the IRS. The original debt was $3,822,990.39, but the IRS knocked off about $700,000 in penalties with an unclear amount of interest still accruing.
Earlier this month, Abbott projected an IRS overpayment of $199,587.56, which officials say can only be used for payroll taxes.
Abbott and the Finance Committee have done an admirable job of reigning in spending this year and meeting on a monthly basis, something that hadn't been done in the past. They deserve credit for all their hard work.
However, there is something else to consider when they project the overpayment that is of course subject to the final numbers from the IRS.
The $199,587.56 figure doesn't include the $131,914.49 paid from the General Fund prior to the tax so really the projection should be closer to $331,502. I still suspect it will be more than that, but we'll find out soon enough.
Whatever the amount ends up being, city leaders have some interesting decisions to make.
This is pure speculation, but it seems reasonable to presume that any excess cash will be placed in a separate fund and used to pay regular payroll taxes. In turn, presumably, that will allow the regular payroll taxes to go into the General Fund or some other account to be used for any purpose city leaders choose. The extra cash could allow the city to have a cushion going into 2014, perhaps to spend on those first-quarter only expenditures that seem to hit the budget hard early on each year.
Also, it will be interesting to see if the City Council appropriates some of that money to pay the legal bills of former Mayor Barrett Harrison and former City Treasurer Doug Bush.
Harrison and Bush have asked to be reimbursed $30,905.79 and $21,034.01, respectively, for expenses incurred because of the IRS matter.
Soon, the proverbial ball will be in the Council's court. There's sure to be interest on how they handle the requests of Harrison and Bush -- and the excess IRS funds, in general.
Mayor Sanders expects to get a payoff figure from the tax advocate in the coming days and the discussion should really kick into high gear then. With an election looming next year, one would think officials will proceed carefully. They would do well to follow the wishes of the constituents who resolved the IRS issue at the ballot box and not blow the money or use it inappropriately.
mbrasfield@blythevillecourier.com