Whitfield County commissioners face a budget “mess,” Chairman Mike Babb says, and they have less than six weeks to sort it out.
Commissioners are grappling with an estimated $5 million deficit for the 2011 fiscal year that starts in January, and they have few options other than payroll to close the hole.
“Sixty-five percent of our budget is employee salaries and benefits,” Babb said. “We’ve got several options. We have across-the-board salary decreases, furloughs … layoffs. There are only certain ways you can address this, and none of the choices are good.”
The county typically passes a $45 million budget, but balancing the budget for the coming year without raising taxes will mean trimming 11 percent by Dec. 31. Commissioners voted in October to hold the millage rate steady at 5.061 mills.
Commissioners have for months heard weekly budget presentations from every entity that receives county money. The final presentation was last week and few agencies or departments have obvious spending cuts available, Babb said.
Now begins several weeks of work sessions as commissioners look for places to trim.
“Commissioners wanted to do this hands-on,” said county Finance Director Ron Hale. “They knew we were facing tough times, so they asked all the department heads to present their budgets to them face-to-face, where they could look at what the department heads were spending.”
County Administrator Bob McLeod and Hale largely have been hands-off during the reviews, answering specific questions but not offering advice on where to cut.
Earlier this year, McLeod announced he was resigning in December and he hinted he was leaving because commissioners didn’t heed his advice for spending cuts in previous budget years.
“I’ve made all the recommendations to the commissioners to help them solve their future budget problems,” McLeod said at the time. “So I’m going to leave the seed and give another person the opportunity to help the commissioners.”
Like many counties, Whitfield is facing sharply declining revenue amid steady — if not increasing — expenses. Property tax revenue is down about 20 percent because property values have tanked in the wave of widespread bank foreclosures.
On top of that, sales tax receipts are down and commercial property tax assessments are off, as well.
Whitfield County entered the 2010 fiscal year with a $22 million reserve fund, mostly excess money from a previous special purpose 1 cent sales tax.
Law requires that excess money be used to offset sales tax increases, so commissioners pulled from it heavily, wagering that the economy would improve by now.
“We sincerely hoped we would be out of this drudgery by now,” said Commissioner Randy Waskul. “But we can’t raise taxes in this economy, and both our sales tax and property tax revenue are down, so now we’ve just got to do what’s right for the county.”
But even while scouring the budget for cuts, commissioners this month approved $357,000 in longevity pay bonuses to county workers.
“That just digs the hole deeper,” said Waskul, the lone commissioner to vote against the bonuses.
Babb said removing the bonus would punish long-term employees unfairly.
“A 20-year employee would lose $1,200 a year and a three-year employee would lose just $120,” he said. “That’s not a fair distribution of the pain.”
But residents shouldn’t see that vote as a signal that commissioners can’t make tough decisions, he said.
“We have the will to make hard decisions,” Babb said. “The decisions are all hard, and they are all going to affect somebody.”