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How Florence, Alabama Found Millions in Sales Tax Revenue

With just over 40,000 residents, Florence is Alabama’s 11th largest city. Home to the University of North Alabama, this vibrant and welcoming town also hosts the state’s most popular renaissance festival, held annually each October.

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Bob Leyde, beloved City Clerk for the City of Florence, Alabama, is a pillar of the local community as well as a talented and innovative administrator. He wisely utilized Avenu’s vast capabilities to generate up-to-the-minute analytics for more accurate projections of sales tax revenue during the COVID pandemic and increase the efficiency of his administration staff.
Here’s a sneak peek:
  • Detailed reporting helped Bob overcome budgeting challenges and increase compliance.
  • Accurate and real-time information about current business opportunities and revenue collection is crucial to his decision-making process.
  • Avenu streamlined the city’s tax administration with a laser-focused audit process.
  • Bob encourages leaders of cities of any size to see how Avenu’s technology can optimize operations and maximize revenue generation.

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

COVID-19 Impact on Kalamazoo County, MI with Thomas Whitener

Thomas Whitener recently unseated a 13-year incumbent in a tight election that was fueled by promises of change and cultural shift that was highly sought after across the county. Thomas is licensed Real Estate Agent, entrepreneur, and former interactive systems and balance designer who is making a big impact on Kalamazoo County. He has built his career on openness and transparency and plans to establish a culture of accountability and fairness to all constituents.

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Thomas joined us to discuss many of the challenges that local government leaders are facing and highlight some of the best insights across the industry.
Here’s a sneak peek of the episode:
  • What it was like to run a people focused campaign during the pandemic
  • The roles and responsibilities of county treasurer
  • The Delinquent Tax Responsibility and how that was affected by COVID
  • Resources that helped constituents avoid foreclosure
  • Budget shortfalls
  • What recovery look like for Kalamazoo County as we climb out of the pandemic

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

COVID-19 Impact on City of Eastvale, CA: The City That Never Stopped

Bryan Jones was appointed as the City Manager of Eastvale, CA in 2018. Under his leadership the city has risen to new heights and become one of the Top 20 Best Places to Live in the country.

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In recent months amidst the COVID-19 pandemic, Eastvale has seen immense growth across various industries including:

    • 32.26% increase in new business applications and renewals
    • 5.95% increase in property taxes
    • 7.69% increase in sales & use tax
    • 6.49 % increase in franchise fees

Learn the principles that made this city a success story during COVID!

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

What the American Rescue Plan Means For State and Local Governments

The COVID-19 public health crisis and resulting economic crisis have put state and local governments under unprecedented strain. The American Rescue Plan provides $350 billion in emergency funding to eligible state, local, territorial and Tribal governments to respond to the COVID-19 emergency and bring back jobs.

State and local governments across America have been under a tremendous strain in the wake of the COVID-19 crisis, and while the need for services has increased, state and local revenues have plummeted as a result of the economic fallout from the crisis.

Who Will Receive Funding

According to specific guidance released by the U.S. Department of Treasury on May 10, 2021, the State and Local COVID Fiscal Recovery Fund will be made available as follows:

States

The state funding portion is approximately $195 billion, with $25.5 billion distributed equally among the 50 states and the District of Columbia, and the remaining amount distributed according to a formula based on unemployment. You can read more on allowable uses and limitations from the National Association of State Auditors, Comptrollers, and Treasurers ARP Analysis.

Counties

The bill includes $65.1 billion in direct, flexible aid to every county in America, as well as other crucial investments in local communities, including $1.5 billion over two years for public lands counties. Specific county-level estimates can be found through the National Association of Counties interactive search table.

Cities

The bill includes approximately $45.57 billion in funding that is available directly to metropolitan cities with a population of 50,000 and $19.53 billion will be administered to cities, towns, and villages with populations fewer than 50,000 (These funds will be directed to each state for further redistribution based on a per-capita formula established by the U.S. Treasury within 30 days). More information can be found at the National League of Cities

When & How Funding Should Be Used

Localities will receive the funds in two tranches – the first, after the U.S. Treasury certifies the proceeds to each jurisdiction and the second, one year later. Funding must be spent by the end of calendar year 2024.

States and local governments will enjoy significant flexibility to allocate funds for the following “eligible uses”:

  1. Supporting public health expenditures, by providing resources for COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health staff
  2. Addressing negative economic impacts caused by the COVID-19 crisis, including economic harms to workers, households, small businesses, impacted industries, and the public sector
  3. Investing in water, sewer, and broadband infrastructure to improve access to clean drinking water and to expand access to broadband internet.
  4. Replacing lost public sector revenue to secure government services despite the reduction in public revenue experienced due to the pandemic
  5. Providing premium pay for essential workers, such as public health and safety staff

Considerations for ARPA Expenditures

ARPA funds are non-recurring and should be applied primarily to non-recurring expenditures.

  • Care should be taken to avoid creating new programs or add-ons to existing programs that require an ongoing financial commitment.
  • Replenishing reserves used to offset revenue declines during the pandemic should be given high priority to rebuild financial flexibility/stability and restore fiscal resiliency.
  • Use of ARPA funds to cover operating deficits caused by COVID-19 should be considered temporary and additional budget restraint may be necessary to achieve/maintain structural balance in future budgets.
  • Investment in critical infrastructure is a particularly well-suited use of ARPA funds because it is a non-recurring expenditure that can be targeted to strategically important long- term assets that provide benefits over many years. However, care should be taken to assess any on-going operating costs that may be associated with the project.

Now is the time to collaborate, listen to your citizens, think about the future, and make investments that will create a sustainable future. Avenu is committed to providing a customized approach to helping governments manage ARPA funding and determining an investment strategy. Contact us today!

 

 

 

COVID-19 Impact on City of Pasadena, CA

COVID tested localities in new in challenging ways. While we are coming out of the pandemic, we can learn from different jurisdictions as we prepare for the future.

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Matt Hawkesworth, Finance Director for the City of Pasadena, CA about the different areas of impact COVID-19 has had on the City and how his team has shifted priorities to help balance ever increasing budget deficits.

In this show we discuss:

  • Top areas the City of Pasadena was affected over the past 12-18 months
  • The approach to using reserves during the process
  • The impact of restaurant closures in a city with one of the largest number per capita
  • The American Rescue Plan
  • The importance of resiliency

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

Local Governments Today Have an Opportunity to Build Trust: Smarter Digital Transformation is Key

When government doesn’t deliver the same level of digital services citizens have come to expect from their private-sector interactions, they lose an opportunity to build trust in their communities.

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In this episode, we talk with Lou Schiavone, Chief Customer Officer at Avenu Insights and Analytics. For the past 20 years, he has focused on serving state and local governments nationwide, leading the sales, development and delivery of a diverse set of innovative solutions. Our discussion delves into:

  • How governments can instill trust in their communities through digital transformation
  • Government’s overreliance on paper driven processes
  • Tax collection processes that are efficient, digitized, and automated
  • Ways government can improve communication and build trust
  • Key takeaways for government leaders looking to instill trust in their community

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

How Local Governments Can Navigate Budget Shortfalls

Local governments are working harder than ever over the last year to manage budget shortfalls. Changes in revenue can impact key services for the community. Accurate forecasting and revenue maximization is key during these uncertain times.

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In this episode, we talk with Paul Colangelo, the CEO of Avenu Insights and Analytics. He brings a wealth of experience to the conversation having over two decades of experience working with local governments. Our discussion delves into:

  • Untapped revenue for local governments during the economic downturn
  • Conducting a business license discovery and recovery review and how it helps with revenue enhancement
  • Preparing for fluctuations in revenue streams as the economy recovers
  • The long term impacts of the COVID pandemic.

This discussion was taken from our show Local Government Insights. If you want to hear more episodes like this one, check us out on Apple, and all your other favorite podcast platforms. Take a moment listen on your favorite platform. We would appreciate your reviews and feedback as we continue to release upcoming episodes.

CASE STUDY: Improve Your Budget & Operation Outlook

How the City of Florence Maximized Compliance, Grew Revenues & Streamlined Tax Administration.

Revenue management has always been a top priority for local governments. Tax revenues come from a variety of sources, including business licensing fees, sales taxes, property taxes, and more. Managing all of these disparate sources of tax revenue is a big task and a huge responsibility, especially when effective revenue management can make the difference between a balanced budget and a budgeting crisis.

But the coronavirus pandemic has made revenue management even more important than before. The pandemic has dramatically impacted tax revenues, and many state and local governments are struggling to adapt to the changing tax landscape that COVID-19 has created. Previously reliable sources of tax income are drying up, while new revenue sources derived from digital businesses and technologies are emerging in real time.

To manage their revenue streams effectively, governments need datadriven, cost-efficient, and streamlined technologies to maximize tax compliance and ensure they get the tax revenue that is owed to them.

Bob Leyde, City Clerk for the City of Florence, Alabama, knows the importance of effective revenue management and a partnership with Avenu has enabled the city to take advantage of cutting-edge technology that has streamlined tax administration and provided deep insight into areas of non-compliance.

Together, we were able to develop a solution to help Florence meet these challenges. Bob Leyde, City Clerk for the City of Florence, Alabama summarized the results when he stated, “Our partnership with Avenu has brought the city well over $3 million dollars of additional revenue that allowed us to provide needed services to our citizens.”

Learn how a combination of our solutions were able to create incredible results for this city.

Florence, Alabama

Digital Government In 2021: Lessons From The Past Year And Top Trends For The Future

By Paul Colangelo, Avenu CEO

If local governments have learned anything from 2020, it’s the importance of digital tools, platforms and services. Amid the unprecedented economic and social disruption incurred by the Covid-19 pandemic, digital governments proved crisis-resistant and efficient enough to thrive.

However, if the pandemic accelerated the digital transformation of government, that transformation is still far from over. In fact, it’s bound to pick up pace as both constituents and government employees become adjusted to ever-increasing digitalization. As we enter Covid-19’s second year and prepare for the future, local governments must continue their efforts at digital transformation.

That means local governments need to stay on top of the latest developments in IT, cybersecurity and digitalization. With that in mind, I want to highlight some of the biggest digital trends to watch for in 2021 and beyond.

To learn the top digital trends of 2021, read the full article on Forbes.

Changing Tax Landscape Requires Prioritizing New Compliance Efforts

By Kennon Walthall, Avenu Senior Vice President

In almost no time at all, COVID-19 has transformed both society and the economy. A rapid shift to remote work and the emergence of more digital-first services, combined with new social distancing and safety protocols, have altered everything from our work patterns and office practices to our home lives and shopping schedules.

While many of these changes hold promise for the future, they come at a cost. This is especially true for state and local governments whose tax revenue  has dramatically been impacted the pandemic, and many are facing   a severe budget crunch. From March to August of last year, as the coronavirus pandemic first took hold, total tax revenue at the state level declined by 6.4%, and state governments were suddenly facing hundreds of billions in lost revenue across the board.

Better revenue management will have to be a top 2021 priority for state and local governments looking to thrive in the post-COVID era. That’s because COVID-19 hasn’t just hurt the budgeting bottom line by depressing tax revenues; COVID is changing how tax revenue comes in and where can it be found, with previously reliable tax revenue streams drying up, while others grow. To stay on top of their revenue streams, governments will need to adopt the data-transparent, cost-efficient and effective technology tools and practices that maximize tax compliance in the new COVID-19 tax landscape and ensure that no tax revenue source goes untapped.

Tax revenue has always been a huge part of our economy, with state and local tax revenue accounting for about 9% of our national GDP. But taxes come in all shapes and sizes, and not every tax contributes equally to total tax revenue across every municipality and all 50 states. That means a major disruptive event, like the coronavirus pandemic, can shift the way tax revenue comes in, creating a disparate economic impact and changing the way taxes ought to be collected.

Take sales tax, for example. In 2017, state and local governments took in about $389 billion in general sales tax revenue, amounting to about 12% of overall revenue. In 2020, COVID-19 reduced sale tax revenue by about $50 billion, mostly by reducing the emphasis on what and how much people bought from heavily-taxed goods and services like restaurants and hotels.

But that overall decline in revenue doesn’t tell the whole story, because the impact from COVID-19’s effect on sales tax revenue wasn’t felt equally across the country.

Only 46 states collect general sales tax, and of those 46 states, some rely on sales tax more heavily than others to balance their budgets. These differences in revenue management led to significantly different COVID-19 outcomes; new research has found that the more a state or local government relied on sales tax income, the higher its unemployment rate for government employees during the pandemic.

But at the same time that sales taxes have gone down, other tax revenues may start to go up. As more people leverage the freedom of remote work to relocate from urban to rural areas, property taxes in some municipalities will rise. And as more people order take-out and use online delivery services, these digital platforms like Uber and DoorDash present yet another lucrative tax revenue stream.

A similar story can be told about a plethora of different tax revenue streams. With stagnant business growth in 2020 and many offices retooling their employees for remote work, business licensing taxes and occupational taxes are likely to decrease. At the same, alcohol sales have increased dramatically and alcohol taxes have grown with them.

What we see across revenue streams, industries, municipalities, and states is a shifting tax landscape, where previously reliable revenue streams are drying up while others are widening and increasing. The key for governments will be their ability to comprehend this changing tax landscape and tap into it effectively by maximizing compliance.

There’s a lot that governments can do, but maximizing compliance will start with an internal audit. As tax revenue streams shift and change, governments need assurance they’re getting what is owed to them. But all too often, cumbersome paper processing, opaque data, and an over-reliance on manual work can hamstring a government’s capacity to get a clear overview of patterns of compliance or noncompliance, especially when tax realities are rapidly changing. A comprehensive, internal audit can ensure that doesn’t happen.

In the same vein, governments must prioritize adopting technology that streamlines tax collection and administration. An automated tax management system, for example, can make sure governments get their tax revenue quickly, easily, and with a minimum of human error. Many of these systems are cloud based and can be quickly and easily implemented for a jurisdiction. Meanwhile, citizens are expecting and often times demanding  an easier and more convenient way to meet their obligations  So, if governments don’t have the digital portals and online payment options that facilitate paying taxes, licensing fees, and fines, then a lot of revenue will potentially get lost in the confusion and upheaval.

These are just a few examples, but the list goes on. The main idea is that better administrative practices and new technology can help governments enhance tax compliance by making tax collection and payment easier and more efficient for both governments and citizens, while also rooting out noncompliance. By doing so, state and local governments can unlock their 2021 revenue streams and face the future of our changing economy and society with strength and success.