HERMANN — Gasconade County administrators last week adopted a 2025 operating budget that calls for almost $4 million worth of expenditures in the General Fund, fueled by strong sales tax revenue during the past five years.

However, the county’s chief budget officer, County Clerk Lesa Lietzow, cautions the County Commission from relying too heavily on continued high growth in sales tax revenue.

“Sales tax receipts in 2024 were better than ever,” but “it’s not assumed that will happen again…” she said in her budget message accompanying this year’s proposed spending plan.

Indeed, local government has benefited from the stubborn inflation rate that has been slow to drop since the economy — both locally and nationally — came out of the coronavirus pandemic. The revenue that was generated by the county’s Use Tax, a sales tax on purchases made from out-of-state vendors that spiked during the pandemic, continues to be strong well into the post-pandemic period. The Use Tax this year will become a crucial source of revenue needed to fund county government services.

“The Use Tax, too, was the highest ever at $569,200 and that same amount was budgeted for 2025,” Lietzow said in her message. But rather than drop all of the Use Tax revenue into the General Fund pot, county officials decided to allocate it among the top three funds: 42 percent into General Fund; 25 percent into Road and Bridge Fund; and 33 percent into the Sheriff’s Department.

This year’s budget shows General Fund projected revenue of $5,802,222, which includes the reserve balance of $2,557,761, “which is safe to say the highest balance ever,” the county clerk noted.

Projected expenditures out of the General Fund are $3,952,858, which includes the required emergency fund set-aside of $97,334.

The county’s total operating budget is considerably larger than what’s shown in the General Fund numbers. That’s because the overall budget also includes funds coming in from outside, such as grants and fees and other non-local sources. However, for the most part that money is merely pass-through, in that it comes in for a specific purpose and its use is not at the discretion of the County Commission. For instance, grant money for the Rock Island Trail can only be used on that project; the CDBG grant to upgrade specific roads can only be used on those roads, not shifted to other roads or to another department of county government.

Most of county government services is financed with General Fund money, which is generated primarily by sales taxes and personal property and real estate taxes. For this year, Lietzow is projecting the half-cent General Fund Sales Tax to produce $1,240,000. If it reaches that point, or even it generates $1,235,000, it will be the sixth consecutive year of record revenue and the foundation for figuring the 2026 operating budget.

However, there is a caveat regarding the sales tax revenue: County administrators must reduce the property tax rate to account for about half the money brought in by the sales tax. That’s a provision of the Hancock Amendment, a controversial decades-old addition to the state constitution aimed at curbing the growth of government. The key factor regarding this provision is that it limits county government’s ability to make use of increased revenue by mandating a rollback in the property tax. Other property tax-supported entities — schools, fire districts, ambulance distances and so forth — have a waiver provision available to them, which allows them to avoid rolling back their property tax rates, enabling them to receive the benefits of growth in property values within those districts.

How much the county’s property tax rate will be adjusted will be decided later this year.

Despite significant sales tax revenue growth during last year, the budget process was not without pain for at least one department. As Lietzow noted in her message, the Road Department’s initial funding request was cut by about $1.5 million, a major reduction for a rural county government agency.

The cut, which includes a year-long delay in most proposed equipment purchases and a moratorium on the county’s chip-and-seal program, was prompted by the need to ensure an adequate amount of local transportation-related money necessary to receive state and federal grants. Those types of projects include the money that has been approved for improvements to the Rock Island Trail east of Owensville to the Soap Creek bridge and matching funds needed for the Community Development Bloc Grant money to upgrade three roads in the Owensville area including Old Highway 19, City Cemetery Road, and Tappmeyer Road.