County raises on shaky ground?
Published: Saturday, March 30, 2013 at 5:16 p.m.
Last Modified: Saturday, March 30, 2013 at 11:25 p.m.
Making up for declining property-tax revenues and finding room for a long-awaited employee raise top Alachua County's list of challenges as its staff prepares a tentative budget for the next fiscal year.
Although the Alachua County Commission has the final say on the budget, its staff must first evaluate various departments' financing to determine what cuts can be made. But the county is already running on a lean budget after years of cuts.
"After four years of declining revenues and budget cuts, obviously facing additional cuts is difficult," said Steve Lachnicht, growth management director and interim budget director for the county.
Staff will present a budget proposal for fiscal year 2013-14 to the County Commission in July. To prepare, employees are working on a continuation budget that would, if approved, maintain the county's fiscal year 2012-13 revenue levels by raising the millage rates for the general fund and municipal services taxing units to make up for the anticipated declines in funding, acting County Manager Rick Drummond said.
The county tentatively expects a 2 percent decline in taxable property values for the next fiscal year, which would result in a related revenue reduction if the commission decides to maintain the current millage rate of almost 8.6 mills. It maintained that rate this fiscal year.
Although the housing market is trending upward, there is usually a two-year delay before the county's taxable property values reflect that improvement, Drummond said. Under the continuation budget, the general-fund millage rate would increase to about 9 mills.
One mill is equal to one dollar of tax for every $1,000 of taxable value.
Commissioners Charles "Chuck" Chestnut IV and Lee Pinkoson both said they would be uncomfortable increasing the millage rate to 9 mills because of the impact it would have on local taxpayers.
"Well, we're still not out of the woods as far as the economic situation, and I think we need to be sensitive to that," Pinkoson said.
The county's gas-tax fund, which pays for road improvements and some Regional Transit System needs, also continues to dwindle, according to a county budget presentation given earlier this month. Gas-tax revenues have declined 25.6 percent since 2009 while expenditures have dropped only 6.5 percent in the same time frame.
The projection for fiscal year 2013-14 puts the county about $700,000 in the hole unless it dramatically reduces its expenditures, Drummond said.
If the commission approves the continuation budget, the county would need to make cuts only to cover a 5 percent raise for county employees, he said. If commissioners decide to maintain the current millage rate, a reduction of more than 6 percent to the general fund operating budget would be necessary.
If such a large cut is necessary, a raise won't be possible, Drummond said. Plus, any cut in the 2 percent range likely will affect county programs, Drummond said.
A 5 percent raise would cost $2.1 million for the commission's employees alone, along with another $2.3 million for Sheriff's Office employees and additional money for the staff of other constitutional officers, according to the county budget presentation.
Drummond proposed a smaller raise for employees last year, but the commission chose not to implement it. It did maintain the property tax rate, however, to give taxpayers a break during tough economic times.
"I see the work that our employees do on behalf of the residents and property owners of the county ... and it's work that the private sector isn't going to do," he said.
He said he thinks it's time to show employees they are valued, not just as workers but to the local economy. However, he isn't sure if the county will be able to include a raise in its final budget. County workers are in the midst of their sixth-straight year without a cost-of-living increase.
Chestnut agreed the employees need a raise but said he won't know whether one is feasible until later in the budget process. It comes down to whether the county can afford it, he said.
"I've got to be fair to the county employees, and I also have to be fair to the taxpayers," he said.
Pinkoson said he hopes to do something to show the employees that the commission values their work, whether via a raise or a one-time salary adjustment for fiscal year 2013-14.
"In a perfect scenario, it'd be great if we could somehow find some money for the employees, and that's one of my objectives as we go forward," he said.
Lachnicht pointed out it could be tough for some departments to make room for a 5 percent raise in their budgets, especially for sectors like growth management that have budgets which primarily fund personnel rather than non-employee expenses. The growth management department has already eliminated its consulting-fee funding entirely and trimmed its advertising allowance, so it gets harder each year to find more things to cut.
In addition to addressing declining property-tax revenue, the county must also find new ways to fund recurring expenses that it covered this fiscal year with one-time money, such as its use of $3.3 million from CHOICES, a voter-approved program that assists uninsured but employed county residents in accessing health services, to pay for an increase in its Medicaid payments to the state.
Pinkoson said handling the county's continuing Medicaid expenses will be the biggest budget issue.
The Sun previously reported the county would need to make up for about $3.4 million in the fiscal year 2013-14 budget in order to pay for the ongoing expenses it covered with one-time money this fiscal year.
Although finding new ways to fund those expenses will be challenging, Drummond said the commission was prepared for it.
"The County Commission consciously made that decision," he said.
Chestnut said he will not support using one-time money for ongoing costs for the new budget. He plans to fund recurring costs with recurring revenues.
"The previous County Commission kicked this can down the road," Chestnut said. "If they'd have dealt with that, I do believe we'd probably be in a much better situation this year. But you know, it is what it is and we have to deal with it."
Contact Morgan Watkins at 338-3104 or firstname.lastname@example.org.