Warren County Commissioners received their first look at a consolidated budget for fiscal year 2019-20.
Even with a 28-cent property tax increase, the outlook for the county is not entirely rosy.
“Across all six local tax funds, we are projecting a net loss of $8.8 million,” said Finance Department director Justin Cotten. “That’s up a little from last year. Last year’s was about $8.3. Our revenues have all gone up, but unfortunately so have our expenditures.”
The $8.8 million deficit compares only revenue to expenditures for the 2019-20 fiscal year. It does not take into account cash on hand available in each department, if departments spend less than they were budgeted, or if revenue comes in higher than projected.
The property tax increase was proposed to cover additional money requested by Warren County Schools and Warren County Sheriff’s Department. If approved, the school system would receive 13.5 cents to cover a $1,000 salary increase for teachers and computer upgrades, while the sheriff’s department would receive the remaining 14.5 cents to cover new correctional officers.
Also included in the budget is a 50-cent salary increase for most county employees, a $300,000 expenditure if the budget is approved.
That increase will not be given to employees previously approved for large raises by Budget and Finance Committee members. Also exempt are employees working in fee offices and in departments governed by maintenance of effort, due to their salaries and raises being set internally.
Cotten presented the combined budget to the county’s Financial Management Committee on Thursday.
In attendance was Cumberland Securities Company senior vice present Scott Gibson, who has been the county’s financial advisor for 25 years. He spoke in favor of the property tax increase.
“You and your predecessors have done an excellent job over the years of managing the finances of the county,” said Gibson. “You have a very low tax rate. You’ve gone 16 years without a tax increase. For the first 12 or 13 years of doing that, I think it worked out fine. The last two to three years it’s gotten to the point where we’ve been robbing Peter to pay Paul. We’d build up a fund balance in one fund and then move it somewhere else to plug the hole. The problem now is we have holes all in the budget.”
Gibson says the county must increase its revenue.
“The county managed to go all those years without a tax increase because, to a certain extent, you put off capital items – roofs on buildings that need replaced and HVAC units that are fairly old. My point is not to criticize. My point is if you put a roof on a building 20 years ago, you are going to have to replace it sooner or later. It makes sense to put some money aside in order to do that. The county has not really done that over the last 20 plus years. Now, we have several things coming that need to be fixed all at the same time.”
He added that the county’s effort to keep the property tax rate low is not financially sustainable.
“This county, if they want to move forward, has to stay on a path that’s sustainable,” said Gibson. “Previously, you were doing a great job. It’s not that you’re doing a bad job today. My concern is that you’ve gotten on a path that is not sustainable. Before we use all our fund balances in all our funds, all the savings you’ve built up over the last 15 years, let’s get back on a path that is sustainable – not only for this budget year but going forward.”
The budget was presented to members of the county Financial Management Committee to allow time for review. A date for that meeting has not been set.