El Paso County officials are beating the bushes for money and think they might have found $5 million more for next year’s budget.

It won’t solve the county’s budget crunch, but it could be used to restore cuts faced by the Sheriff’s Office, District Attorney’s Office and Health Department if a 1 percent sales tax hike doesn’t pass on Nov. 4.

“Because we’re asking taxpayers to raise the sales tax,” Commissioner Jim Bensberg said, “we want to show we’re collecting all the water that comes into our reservoir.”

The revenue would come from the county’s 1 percent use tax, enacted in 1988, which is paid on building materials purchased elsewhere and used in the county.

The city of Colorado Springs now collects the tax for the county on building materials used within city limits, while the state collects it on materials used outside city limits.

County Administrator Jeff Greene told commissioners Monday the city’s collections totaled only $661,000 last year, while the county believes it is due $5.6 million.

One reason for the shortfall, he said, is the city doesn’t collect the tax on residential construction materials or audit the tax paid on commercial projects costing less than $100,000.

He also said it’s hard to know if the county is getting all the use tax collected by the state, because the state doesn’t track use and sales taxes separately.

The $5 million figure was based on the value of construction reported to the Regional Building Department by builders pulling building permits, he said.

The county’s idea is to have Regional Building collect the tax from builders when a building permit is issued or before a final inspection is conducted.

The tax would be calculated based on a formula that assumes 50 percent of the project’s cost is for materials or by keeping receipts to document actual taxes paid. Regional Building would retain 1 percent of payments to cover its costs.

Bensberg, a Regional Building commissioner, suggested the change, because he thinks the shortfall suggests some contractors avoid the tax by purchasing materials out of state and shipping them to a construction site.

“If the system we are proposing works well in Fremont County, surely it should work well in El Paso County,” Bensberg said. “This is not a brand new reinvent-the-wheel tax collection system.”

The building industry has reservations.

“It shifts the burden of accountability to private companies, many of which are quite small,” Housing and Building Association President Bobby Ingels said.

Dave Keller, a homebuilder, disputed the county’s $5 million figure, saying builders are paying the tax.

“If you have such a problem, where is the auditing system?” Keller said. “An audit process would more than pay for itself.”

Bensberg said setting up an audit department would be inefficient and expensive.Commissioners are slated to vote on the change Nov. 20.

Contact the writer: 636-0238 or pam.zubeck@gazettedev.gazette.com