County finance director: Budget could be even tighter next year

Published 12:08 pm Wednesday, February 16, 2011

After crunching the numbers for months, Whitfield County Finance Director Ron Hale believes local taxpayers are getting their money’s worth, especially since he points out that Whitfield County has the state’s 23rd largest economy but the fourth lowest tax rate.

“There are only three counties in Georgia that have a lower M&O (maintenance and operation) tax rate than Whitfield County,” he said, “so we’re operating the 23rd largest county with the 155th lowest taxes. And you can’t do that without operating in a very lean, efficient manner.”

But the 2012 budget could be even tighter, Hale is predicting.

“We are facing more pressures next year unless some additional revenues are found or some economic conditions change,” he said, “because this year’s budget included some one-time revenues that helped us balance it.”

Those one-time shots included $1.5 million from the Solid Waste Authority fund reserves. “The city and county representatives thought the reserves were more than the Solid Waste Authority needed to hold back to close out the current landfill,” Hale said, “so they took a million and a half dollars for the city and a million and a half dollars for the county for each to put into their general revenue funds.”

That’s money that won’t be there again in 2012.

Even after the commissioners cut this year’s budget by $5 million and added back the extra $1.5 million from the landfill fund, the county is still having to dip into its reserves for another $3.4 million to balance the budget.

“It looks like at the end of 2011, our reserves will be very close to the 90-day reserve level of roughly $10 million that county policy recommends we have on hand to keep routine operations and cash flow going,” Hale said.

The reserve money was there in the first place because all of the collections from a 2001 SPLOST (Special Purpose Local Option Sales Tax) were not needed to complete the projects.

“We’ve been able to use these reserves because we had $8.4 million left over from the 2001 SPLOST because water line construction came in under budget,” Hale said, “and the law requires that we either expire any outstanding county debt (and we didn’t have any at that time) or use the money in lieu of tax increases or to actually give a tax decrease.”

That reserve fund has allowed the county over the last three years to run much more normal operations at an already very small, very efficient county government during these tough economic times when Whitfield was experiencing major drops in revenue, Hale said.

“We could actually dip lower than our 90-day reserve level,” he said. “That level is a guidance, not a law, but it’s just not prudent not to have some rainy day funds.”

Another factor that will strain next year’s budget is that Transportation Special Purpose Local Option Sales Tax (TSPLOST) money won’t be available in 2012 for paving.

“2011 will be the last year that we will have the TSPLOST funds being used for most of our road operations,” Hale said. “We try to resurface and repair roads at a regular interval. To keep that schedule as it is currently costs the county about $2.5 to $3 million a year. That’s being paid for in 2011 by TSPLOST funds, but that money will be gone for 2012.”

It will all add up to some very tough decisions for the commissioners at the end of this year as they prepare the 2012 budget.

 “So even with everything that we did to address these economic times and try to keep operations at the level that the commissioners felt prudent for 2011,” Hale said, “when it comes time for 2012, we could be facing additional cuts of upwards of $7 million to continue to operate as-is on the same revenues. There will be some hard choices — and there were some hard choices made this year, too. Commissioners I’m sure would have liked to support some of the departments to a much higher level.”

“As an illustration of the magnitude of some of the cuts borne in 2011, the average county department was cut about 11 to 12 percent,” Hale said, noting that some of the outside agencies that are partially supported by county funds were affected to an even higher degree. “The health department, for example, had a request for $1.2 million, but they were funded only $250,000.”

That $7 million figure of additional cuts also does not include capital for projects such as the new Westside Park or the new ladder fire truck needed in case of a fire at the new county high school, nor does it address capital needed to replace worn-out vehicles for the sheriff’s office and public works. It also doesn’t include raises for county employees, whose salaries have been frozen at 2008 levels, and it would also mean that furloughs implemented in 2011 would have to continue or increase.

“There are no easy solutions for a lot of this,” Hale admits, “and the departments don’t have much wiggle room. We’ve taken that away a long time ago. The budget continues to get tighter, and there’s no real relief in sight even looking at the recession officially being over and starting some true sustained growth, because the growth rate is not running 18 to 20 percent — but just 3 percent.”