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Officials fear revenue shortfall from new computer system

By DAVID MILES The Associated Press

The state's new method for collecting and distributing city and county sales taxes is receiving mixed reviews from local officials, some of whom fear they might see temporary revenue shortfalls.

The Department of Revenue hopes to have its new computer system running Nov. 8, but it might not be up to full speed until mid-December.

Revenue Secretary Karla Pierce said Monday the department must improvise how it distributes sales tax money received from merchants and returned by the agency to cities and counties.

In November and December, Pierce said, the department will start calculating local sales tax receipts using the new computers. However, it will give cities and counties the same amount they received for that month last year if the computer can't process all the data or some unforeseen problem occurs.

"We don't want to short them their money," Pierce said. "We certainly don't want any hardship on the counties."

The department plans to make up the difference early next year between estimates and actual money received after the new computers are operating at full capacity.

If what the agency receives is less than what is due, then the state is owed more money; if the Revenue Department receives more, the money goes back to cities and counties that overpaid.

Florence Whitebread, Geary County Commission chairwoman, said she is worried the county might be shortchanged for the rest of this year.

"We may need that money before the end of December," said Whitebread, who lives near Junction City. "I'm not sure how this is all going to play out."

The commission expressed concern last week about the way the Revenue Department will distribute sales tax revenues until the new system is in place.

"We have a number of new businesses," Whitebread said. "To estimate our taxes based on our taxes last year I think would be very difficult."

Pierce said the estimated tax distribution is only an interim step until the new computer system is working. She said the system eventually will make it easier for businesses to file tax payments and will allow local governments to receive tax money sooner.

"This distribution issue is a good thing for counties and cities," Pierce said.

Larry Tucker, president of the Kansas County Treasurers Association and Reno County treasurer, looks forward to that improvement, noting it takes his county about a month to receive local sales tax money.

"The sooner we get the money, the sooner we can invest that," said Tucker, of Hutchinson.

Tucker said most county treasurers aren't very concerned about a temporary revenue shortfall.

Don Moler, executive director of the League of Kansas Municipalities, said he hasn't received any phone calls from members about the change.

The improvements to the sales tax system are part of a $74 million modernization of the state's tax collection system, which is expected to be completed next year.

American Management Systems, which has received criticism for its work in Kansas and other states, expects to get $54 million for its part in the project. The company, based in Fairfax, Va., has said there is nothing wrong with its computer systems.

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