County Struggles With Shortfall In Budget
July 28, 2016 at 4:25 p.m.
Even with Kosciusko County having the lowest county tax rate in Indiana, a budget crisis of $1.3 million is still looming over the county.
The county council wants to avoid that crisis so it began working on a solution Thursday at its meeting.
There are three top reasons for the budget problem, according to council chairman Jim Tranter.
First, Kosciusko's county option income tax distribution, set by the Indiana State Department of Revenue, was reduced by $715,108 for 2003. The county is dependent on the state department setting the amount to be received, and that amount is beyond the county's control.
Second, because of the drastic downturn in interest rates, the interest budgeted in the county general fund in 2001 for 2002 will not be received nor can the county anticipate that rate of return in 2003. According to county auditor Sue Ann Mitchell, in 2001, the county received $1.1 million in interest. So far in 2002, the county has received $400,000 and the county budgeted to receive $800,000. The interest accumulates from the county's bank balance on a daily basis.
Third, the county is only allowed to raise a certain amount of taxes and the maximum levy calculation formula was changed due to legislation passed in the General Assembly's special session. This change has reduced the amount of money the county can collect.
To try to prevent a budget crisis in the county, the county council voted unanimously to "freeze" all spending for all county departments' 400 accounts (capital outlays) beginning immediately, except the 400 accounts of the county commissioners and county highway. For 2003, the council approved the 400 accounts as budgeted but will revisit the total budget at the end of the year and make changes if necessary. At that time, the council hopes to have a better financial picture of the county. If any department needs any capital outlay items, they are to request permission to purchase them from the commissioners. The county highway department was not included because its funds are totally separate and not included in the maximum levy calculation.
The council also Thursday approved a resolution setting a flat amount for the cumulative bridge fund at $543,871. The resolution allows only the amount of funds being collected in 2002 to be collected in 2003. This will not affect the future growth of the fund.
And, in the near future, the council may eventually freeze all new hires as a means of avoiding a budget crisis. The council decided to discuss this issue further at a later date.
Tranter said county budgets were hit hard in Indiana partly because of 9/11, because of the economy and because of the state's fiscal mess. "Because of those woes, we're suffering in this county. One thing we can pride ourselves on is we have the lowest tax rate in the state," he said. However, having the lowest tax rate doesn't help the county when it needs to raise money, he said.
With the more than $1.3 million the county expects to lose next year, Tranter said, they must first look internally to make up the shortfall. The first area is the 400 accounts being frozen and looking for user fees. Thursday, Tranter and county administrator Ron Robinson will meet with all departments on how they can help the county cut costs. "We want them on board with us," he said.
Then at the end of this year, Tranter said, the county council will review its budget to be certain the county is still on track financially. If additional cuts to budgets are necessary then, reductions can be made by resolution in January.
"We're going to try to be as fiscally responsible as possible," he said.
At this point, Tranter said, the county does not want to tamper with the recommended raises for county employees - they want to keep those in place. Personally, he said, he believes that's not where they need to cut dollars because the employees are the ones who have to do the work for the county.
The changes the county is making, he said, will not eliminate the $1.3 million shortfall, but will get the county down to approximately $900,000. There are some operating dollars the county can tap into in early 2003, but they don't want to do that all at once either.
Councilman Tom Anglin said all the problems causing the budget concern are "beyond our control." He said it was the council's responsibility to watch the funds and make decisions that may not be very popular.
Tranter said approximately $415,000 total in county general was budgeted for the various departments' 400 accounts for this year. So far, only $164,000 has been spent, according to information Kosciusko County Auditor Sue Ann Mitchell provided to the council. Today, Mitchell said, the department heads do a very good job of controlling spending in those accounts and spend very few dollars. Most of the expenses this year have been computer-related expenses.
"Two-hundred fifty thousand dollars goes a long way," said Tranter.
How the departments spend their money this year, councilman Larry Teghtmeyer said, is going to affect them next year.
Harold Jones, councilman, said he wants the hiring freeze to start immediately. But Robinson said while it all "sounds well and good," the county has at least one office, the county auditor's office, conducting interviews to fill two positions that the office needs filled "and that's one office you don't want to do that to." The office can't function without those two positions being filled, he said, and "most offices are bare bones as is."
Whatever the council does, councilman Maurice Beer said, they will step on someone's toes.
"Fortunately," said Jones, "we're not in a crisis but we're trying to avoid one."
The county council approved the adoption of the 2003 budget as presented with the understanding they will vote on it again at the end of the year. Teghtmeyer said the council is going to change it and will have a final vote on it.
Also approved was a resolution setting the flat dollar amount for the cumulative bridge fund.
Later, council vice chairman Brad Tandy asked Mitchell if there will be any cuts in the money the county receives from the Economic Development Income Tax. Mitchell said there would be a cut of $315,000 but it will not affect the county's ability to pay the bond payments on the Justice Building renovation and expansion project.
"You're right where you need to be there," she said Thursday. This morning, she said, "We are very solvent in our obligations."
In other business:
• Robinson told the council that the pay between county and city dispatchers was not equal as the council thought. He will present more information regarding those pay levels to the council at its Oct. 3 meeting.
• The council decided not to make any decision on supplementing the Victims of Crime Act/STOP Violence Against Women grants until January to let the new prosecutor make decisions on those positions. The money to supplement the grants was also not in the budget.
• Salaries that could not be allowed because the money requested in the original budget was not high enough will be addressed as additional appropriations after January. [[In-content Ad]]
Even with Kosciusko County having the lowest county tax rate in Indiana, a budget crisis of $1.3 million is still looming over the county.
The county council wants to avoid that crisis so it began working on a solution Thursday at its meeting.
There are three top reasons for the budget problem, according to council chairman Jim Tranter.
First, Kosciusko's county option income tax distribution, set by the Indiana State Department of Revenue, was reduced by $715,108 for 2003. The county is dependent on the state department setting the amount to be received, and that amount is beyond the county's control.
Second, because of the drastic downturn in interest rates, the interest budgeted in the county general fund in 2001 for 2002 will not be received nor can the county anticipate that rate of return in 2003. According to county auditor Sue Ann Mitchell, in 2001, the county received $1.1 million in interest. So far in 2002, the county has received $400,000 and the county budgeted to receive $800,000. The interest accumulates from the county's bank balance on a daily basis.
Third, the county is only allowed to raise a certain amount of taxes and the maximum levy calculation formula was changed due to legislation passed in the General Assembly's special session. This change has reduced the amount of money the county can collect.
To try to prevent a budget crisis in the county, the county council voted unanimously to "freeze" all spending for all county departments' 400 accounts (capital outlays) beginning immediately, except the 400 accounts of the county commissioners and county highway. For 2003, the council approved the 400 accounts as budgeted but will revisit the total budget at the end of the year and make changes if necessary. At that time, the council hopes to have a better financial picture of the county. If any department needs any capital outlay items, they are to request permission to purchase them from the commissioners. The county highway department was not included because its funds are totally separate and not included in the maximum levy calculation.
The council also Thursday approved a resolution setting a flat amount for the cumulative bridge fund at $543,871. The resolution allows only the amount of funds being collected in 2002 to be collected in 2003. This will not affect the future growth of the fund.
And, in the near future, the council may eventually freeze all new hires as a means of avoiding a budget crisis. The council decided to discuss this issue further at a later date.
Tranter said county budgets were hit hard in Indiana partly because of 9/11, because of the economy and because of the state's fiscal mess. "Because of those woes, we're suffering in this county. One thing we can pride ourselves on is we have the lowest tax rate in the state," he said. However, having the lowest tax rate doesn't help the county when it needs to raise money, he said.
With the more than $1.3 million the county expects to lose next year, Tranter said, they must first look internally to make up the shortfall. The first area is the 400 accounts being frozen and looking for user fees. Thursday, Tranter and county administrator Ron Robinson will meet with all departments on how they can help the county cut costs. "We want them on board with us," he said.
Then at the end of this year, Tranter said, the county council will review its budget to be certain the county is still on track financially. If additional cuts to budgets are necessary then, reductions can be made by resolution in January.
"We're going to try to be as fiscally responsible as possible," he said.
At this point, Tranter said, the county does not want to tamper with the recommended raises for county employees - they want to keep those in place. Personally, he said, he believes that's not where they need to cut dollars because the employees are the ones who have to do the work for the county.
The changes the county is making, he said, will not eliminate the $1.3 million shortfall, but will get the county down to approximately $900,000. There are some operating dollars the county can tap into in early 2003, but they don't want to do that all at once either.
Councilman Tom Anglin said all the problems causing the budget concern are "beyond our control." He said it was the council's responsibility to watch the funds and make decisions that may not be very popular.
Tranter said approximately $415,000 total in county general was budgeted for the various departments' 400 accounts for this year. So far, only $164,000 has been spent, according to information Kosciusko County Auditor Sue Ann Mitchell provided to the council. Today, Mitchell said, the department heads do a very good job of controlling spending in those accounts and spend very few dollars. Most of the expenses this year have been computer-related expenses.
"Two-hundred fifty thousand dollars goes a long way," said Tranter.
How the departments spend their money this year, councilman Larry Teghtmeyer said, is going to affect them next year.
Harold Jones, councilman, said he wants the hiring freeze to start immediately. But Robinson said while it all "sounds well and good," the county has at least one office, the county auditor's office, conducting interviews to fill two positions that the office needs filled "and that's one office you don't want to do that to." The office can't function without those two positions being filled, he said, and "most offices are bare bones as is."
Whatever the council does, councilman Maurice Beer said, they will step on someone's toes.
"Fortunately," said Jones, "we're not in a crisis but we're trying to avoid one."
The county council approved the adoption of the 2003 budget as presented with the understanding they will vote on it again at the end of the year. Teghtmeyer said the council is going to change it and will have a final vote on it.
Also approved was a resolution setting the flat dollar amount for the cumulative bridge fund.
Later, council vice chairman Brad Tandy asked Mitchell if there will be any cuts in the money the county receives from the Economic Development Income Tax. Mitchell said there would be a cut of $315,000 but it will not affect the county's ability to pay the bond payments on the Justice Building renovation and expansion project.
"You're right where you need to be there," she said Thursday. This morning, she said, "We are very solvent in our obligations."
In other business:
• Robinson told the council that the pay between county and city dispatchers was not equal as the council thought. He will present more information regarding those pay levels to the council at its Oct. 3 meeting.
• The council decided not to make any decision on supplementing the Victims of Crime Act/STOP Violence Against Women grants until January to let the new prosecutor make decisions on those positions. The money to supplement the grants was also not in the budget.
• Salaries that could not be allowed because the money requested in the original budget was not high enough will be addressed as additional appropriations after January. [[In-content Ad]]