The Price of Liberty is Eternal Vigilance
County Council, March 11
Budget woes - this year is difficult
but 2011 could be worse!Warwick Jones
As it is about this time every year, the Finance Committee was treated yesterday with a review of the current year’s budget, and some projections for the future. It was not a pretty picture though we would be surprised if any Council member expected otherwise. Revenues for the current fiscal year (FY2010) are running below original estimates but the projected shortfall of $2.9 million is expected to be made up by more cost reductions and without significant impact on services.
However, staff was less than happy about the outlook for 2011. Some drastic measures may be called for.
First the current fiscal year – revenue from property taxes, licenses and intergovernmental receipts are running lower than projected. In large measure, the decline in property taxes reflects the delay in receipts rather than any decrease in the County’s billings. Reassessments, delinquencies and foreclosures have slowed the flow and although most property taxes will ultimately be recovered, a greater proportion of those expected in 2010 will flow into subsequent years. The decline in licenses and permits, and intergovernmental are largely reflections of the state of the economy. To see staff estimates for the year, press Download file.
In discussing the outlook in 2011, staff noted the continuation of pressures currently being experienced. It anticipated further falls in property taxes, fees and licenses, and fines and forfeitures. Presently, costs were projected to rise in 2011, in part due to mandatory increases, and projected costs exceed projected revenues by $8.3 million. Staff noted that with the cost cutting of the last 2 years, further cuts would be painful. The County was not allowed to sustain a deficit and a balance had to be achieved. So Council has some hard choices before it as it goes into the budget process in the next few months. And staff proceeded to list the choices. Press Download file for summary.
- No new public services without corresponding revenues
- Shift costs outside the General Fund
- Increase fees and establish new fees
- Prioritize or reduce public services
- Reduce personnel cost
- Use the 2 months Financial reserves (Fund Balances)
- Increase millage rate
- Decrease the LOST credit
- Across the board pay cut
Staff gave no hint of what it favored but indicated the pain that each of the measures might entail. And Council members gave no hint as to the action they preferred though Council member Summey did opine that staff was too pessimistic in its projections. Assistant County Administrator Bustraan responded, saying that projections over the last 2 years had been too optimistic and inferred that staff did want to be bitten again.
And what of 2012?
Little was said about projections for 2012. On the face of the figures presented by staff, it may be a more difficult year than that projected for 2011. Staff is projecting a further fall in revenue, again anticipating a further fall in property taxes and intergovernmental transfers. There was no discussion of costs. Crossing the 2011 bridge has to tackled first! Press Download file for 5 year projection of General Fund revenues.