Treasurer warns state law change and other revenue shifts are trimming local use tax receipts

Stephenson County Treasurer briefed the Finance Committee April 14 on investments, cash positions and an unexpected reduction in local use tax receipts tied to a recent state law change.

The Treasurer reported total funds declined only slightly from February to March, and highlighted several maturing certificates of deposit coming due with expected interest proceeds. She also flagged a sharp decline in the county’s local use tax payment: a preview check showed $6,600, “a drop of 80%,” she said, compared with the prior month’s approximately $54,000.

Why it matters: The Treasurer said the change stems from a state public act that shifted how some sales and use tax dollars are allocated; the county should expect fluctuations and cannot assume a dollar-for-dollar offset from other sales-tax lines. Because the county general fund relies on components of sales and replacement taxes, the Treasurer said she expects shortfalls in some lines this fiscal year.

Key points from the report

- Investments and cash: The Treasurer said two certificates matured in March and three larger CDs (totaling about $1.2 million) will mature Thursday, producing more than $30,000 in interest across those accounts. She described a diversified approach that favors local banks and short-term instruments.

- Nursing center adjusted cash: The Treasurer presented a color-coded report to show “actual cash” (bank balances) and “adjusted cash” that reflects funds other county accounts have fronted on behalf of the county nursing center. She said certain county funds had paid expenses for the nursing home and had not been reimbursed to the tune of roughly $320,000, and she recommended transparent reporting to show the intra-county advances.

- Public Act and local use tax: The Treasurer identified a recent state law (transcribed in the meeting as “Public Act 1030983”) that changed allocation rules for remote and destination-based sales and use taxes. She said the law went into effect Jan. 1 and, because collections are reported with a lag, the county saw impacts in April receipts. “It was $6,600 — a drop of 80%,” the Treasurer said of the latest local use tax preview payment. She warned the committee to expect month-to-month volatility and said the county likely will not see the line return to previous levels.

- Property tax prepayments and timing: The Treasurer and county staff discussed efforts to return to earlier property-tax billing timelines; officials said they want to mail bills earlier if state multipliers allow, to restore an earlier first-installment schedule and make county distributions timelier.

Ending: The Treasurer asked the committee to monitor the new law’s impacts and prepare for likely shortfalls on the local use tax and personal-property replacement tax lines; she said she will continue to track receipts and provide updates at future meetings.