Whitfield County Finance Director Ron HaleDALTON, Ga. — Faced with a deficit of nearly $7 million and declining revenues for 2012, Whitfield County commissioners said staff layoffs and other cost-cutting measures must remain on the table as they finalize the budget for next year.
The $42.3 million budget already builds in four furlough days for county employees, a hiring freeze and no wage increases for the fourth year in a row. Most departments and agencies will be funded at the same level as last year.
Commissioners earlier voted not to raise property taxes this year, but they say an increase is all but inevitable next year. At 5.061 mills, Whitfield’s property taxes are the second lowest in the state. To make up the deficit, the tax would have to be raised about 3 mills.
Commissioners met Wednesday for a two-hour workshop to discuss the 2012 budget. They plan to hold a public meeting the first week in December and vote on final budget numbers by the middle of December.
The mood at Wednesday’s meeting, attended by many department heads, was often somber. Attendees used words such as “draconian” and “painful.”
“We are going to plan for the worst and hope for the best,” Commission Chairman Mike Babb said. “We feel like we’ve made some hard decisions already, but there are still a lot of unknowns.”
County Finance Director Ron Hale gave a PowerPoint presentation with the numbers — expected expenditures of $35.5 million and a budget of $42.3 million. Those numbers included mostly operating costs, with only a bare minimum of capital projects.
The county has dipped deeply into its reserve in the last few years, draining it to about $9 million by the end of this year. If they use the reserve to make up the deficit next year, it would drop to $2 million, well below the recommended level.
The county is expected to see a drop in revenues next year for several reasons. Property tax revenues are expected to drop about 5 percent, while sales tax dollars are expected to increase only slightly.
County commissioners voted last month to raise an inventory-tax exemption on businesses from 20 percent to 100 percent, which will cost the county about $1.6 million in lost revenues.
Some of the budget numbers depend on a sales-tax referendum that is on the ballot in Tuesday’s election. If approved, the referendum will bring a 1 percent increase in sales tax for capital projects, with about $12.5 million slated for county use.
Most of that money would be used for capital projects, but the county could use nearly $2 million for debt service, easing some of the pressure.
With about 65 percent of the budget going to staff salaries, the commissioners discussed ways to cut those costs. They agreed to eliminate a longevity payment, beginning next year. The payment currently received by employees will be factored into their pay, but will not be increased after next year.
Hale said he and County Administrator Mark Gibson do not recommend cutting staff. The county already has fewer staff and spends less money than other counties similar in size, Hale said.
But Commissioner Robby Staten said he objects to taking staff cuts off the table.
“I’m not going to pass a budget that puts us $7 million in the hole,” he said after the meeting. “Either we have to cut payrolls, or we ask the citizens what services they don’t want.”