County Wrestles With Unpredictable Funding
July 28, 2016 at 4:25 p.m.
While Kosciusko County's expenses keep going up, its revenues keep dropping.
And because of its financial situation, while the county will be able to continue to pay its employees next year, they may not get a raise.
County auditor Sue Ann Mitchell said county employees did get a 2.5 percent raise this year, however, while employees in other counties did not.
"The county just got to a point where the other counties were last year. We're not broke. We have the money to function," she said.
Several large expenses have put the county into financial constraints. First, there's been a large increase in the county employees' health insurance - $600,000 more than last year. Secondly, the county received notice that it has to pay 5 percent toward each employee's Public Employees Retirement Fund instead of 4.25 percent.
"That's another large increase," Mitchell said. The county employs almost 300 people.
Due to Homeland Security issues, the county's liability insurance also jumped.
And an additional factor for next year's budget, Mitchell said, is that the county has to budget for 262 employee days instead of 261 days because of Leap Year - an additional $33,000 expense.
To pay for all those expenses, the county in part has to rely on the state for some funding.
Already, Mitchell said, the county has been advised the County Option Income Tax will be cut by 10 percent. "That's a pretty big chunk of change," she said.
Interest rates are way down as is the county's available money to invest.
Because of the "unpredictable stability" of state funding, Mitchell said, it's hard to be in a position where one has to rely on the state. COIT is an example of that, she said, because while the county keeps asking for accountability for the state's figures, the county keeps getting the same figures reported back every month and Mitchell said she knows they are not generating the same figures month after month.
"We send our money to Indianapolis," she said, "and we get no account of that," which is frustrating. Senate Bill 166 attempts to address that issue, but it won't help for at least another two years.
To deal with the rising costs and the decreasing revenue, the county has tried to maximize the revenues received. As an example, the county made an application for public defender funds, which should net the county an additional $70,000. All the departments' 400 accounts - office equipment, etc. - have been cut. If any of the departments need equipment, such as computers or chairs, they must make a request to the county commissioners.
As the county prepares its budget, it is preparing an 18-month budget - from July to December of this year and then for all of 2004. The county council, which is the financial body of the county, has to consider what expenditures for the rest of 2003 are necessary and what additional appropriations are necessary to finish the rest of the year. That will help the county decide what its needs for the next 18 months are going to be.
To figure out what the county's revenues will be, the county will look at the actual cash balance it has as of June 30 and add in whatever taxes are to be included - but that's where it gets a little sticky. The county knows what it should be collecting, Mitchell said, but because some people's taxes may increase this year, some people may not be able to pay their taxes while others may appeal their assessment altogether.
The tax collection uncertainties caused by the delay in the reassessment, causing a delay in the tax bills being sent out, have put an uncertainty on what the rate of the county's tax collection will be. The county has to face the reality, Mitchell said, that some people may not be able to pay their taxes or may appeal them.
Further complicating the issue is the idea that everyone's taxes are going up, but the fact of the matter is not everyone's taxes will go up. Some actually will go down. Cities, towns, schools and libraries can increase their tax levies no more than 4.25 percent more than the previous year. Before this year, they could collect a tax levy of 5 percent more than the previous year. It's less of an increase the county can collect now.
If that's not enough to think about, don't forget the Justice Building expansion and renovation project. Expenditures related to the building have come in higher than the county estimated.
"There was no choice in building the building," Mitchell said. If the county didn't, the American Civil Liberties Union would have demanded the county build a new building and the county would have lost most of its control over a new justice building facility.
Fortunately for the county, Mitchell said, they had the foresight to create the cumulative capital development fund and the cumulative jail fund as well as implement the Economic Development Income Tax to help pay for the Justice Building. The county is able to pay for the building without taking money away from elsewhere. The county pays $947,500 every six months for the facilities, with that expense being paid out of EDIT funds.
Mitchell said the county always has been frugal. But now, they will have to be more frugal than before. The county council, in budget planning, will have to look again at the budget amounts the county is working off of this year and see if any more cuts can be made from this year's budget. The county is creating a central purchasing office, which it hopes will save it money by buying supplies in bulk.
Requests for new employees will be heavily scrutinized.
Mitchell said, "The county council has been pretty conservative. Thank God it has been because otherwise, we wouldn't have been able to survive another year."
Lean times make one look at how you conduct business from a new perspective, she said, and try to find more cost-saving measures.
"The good side is that we've been frugal before, now the county has become even more cost aware," she said.
Like a horror story, however, there always is the unexpected when it comes to dealing with the state government. Mitchell said she's concerned more information could come from the state, from PERF or another source and throw another wrench into the machine. [[In-content Ad]]
While Kosciusko County's expenses keep going up, its revenues keep dropping.
And because of its financial situation, while the county will be able to continue to pay its employees next year, they may not get a raise.
County auditor Sue Ann Mitchell said county employees did get a 2.5 percent raise this year, however, while employees in other counties did not.
"The county just got to a point where the other counties were last year. We're not broke. We have the money to function," she said.
Several large expenses have put the county into financial constraints. First, there's been a large increase in the county employees' health insurance - $600,000 more than last year. Secondly, the county received notice that it has to pay 5 percent toward each employee's Public Employees Retirement Fund instead of 4.25 percent.
"That's another large increase," Mitchell said. The county employs almost 300 people.
Due to Homeland Security issues, the county's liability insurance also jumped.
And an additional factor for next year's budget, Mitchell said, is that the county has to budget for 262 employee days instead of 261 days because of Leap Year - an additional $33,000 expense.
To pay for all those expenses, the county in part has to rely on the state for some funding.
Already, Mitchell said, the county has been advised the County Option Income Tax will be cut by 10 percent. "That's a pretty big chunk of change," she said.
Interest rates are way down as is the county's available money to invest.
Because of the "unpredictable stability" of state funding, Mitchell said, it's hard to be in a position where one has to rely on the state. COIT is an example of that, she said, because while the county keeps asking for accountability for the state's figures, the county keeps getting the same figures reported back every month and Mitchell said she knows they are not generating the same figures month after month.
"We send our money to Indianapolis," she said, "and we get no account of that," which is frustrating. Senate Bill 166 attempts to address that issue, but it won't help for at least another two years.
To deal with the rising costs and the decreasing revenue, the county has tried to maximize the revenues received. As an example, the county made an application for public defender funds, which should net the county an additional $70,000. All the departments' 400 accounts - office equipment, etc. - have been cut. If any of the departments need equipment, such as computers or chairs, they must make a request to the county commissioners.
As the county prepares its budget, it is preparing an 18-month budget - from July to December of this year and then for all of 2004. The county council, which is the financial body of the county, has to consider what expenditures for the rest of 2003 are necessary and what additional appropriations are necessary to finish the rest of the year. That will help the county decide what its needs for the next 18 months are going to be.
To figure out what the county's revenues will be, the county will look at the actual cash balance it has as of June 30 and add in whatever taxes are to be included - but that's where it gets a little sticky. The county knows what it should be collecting, Mitchell said, but because some people's taxes may increase this year, some people may not be able to pay their taxes while others may appeal their assessment altogether.
The tax collection uncertainties caused by the delay in the reassessment, causing a delay in the tax bills being sent out, have put an uncertainty on what the rate of the county's tax collection will be. The county has to face the reality, Mitchell said, that some people may not be able to pay their taxes or may appeal them.
Further complicating the issue is the idea that everyone's taxes are going up, but the fact of the matter is not everyone's taxes will go up. Some actually will go down. Cities, towns, schools and libraries can increase their tax levies no more than 4.25 percent more than the previous year. Before this year, they could collect a tax levy of 5 percent more than the previous year. It's less of an increase the county can collect now.
If that's not enough to think about, don't forget the Justice Building expansion and renovation project. Expenditures related to the building have come in higher than the county estimated.
"There was no choice in building the building," Mitchell said. If the county didn't, the American Civil Liberties Union would have demanded the county build a new building and the county would have lost most of its control over a new justice building facility.
Fortunately for the county, Mitchell said, they had the foresight to create the cumulative capital development fund and the cumulative jail fund as well as implement the Economic Development Income Tax to help pay for the Justice Building. The county is able to pay for the building without taking money away from elsewhere. The county pays $947,500 every six months for the facilities, with that expense being paid out of EDIT funds.
Mitchell said the county always has been frugal. But now, they will have to be more frugal than before. The county council, in budget planning, will have to look again at the budget amounts the county is working off of this year and see if any more cuts can be made from this year's budget. The county is creating a central purchasing office, which it hopes will save it money by buying supplies in bulk.
Requests for new employees will be heavily scrutinized.
Mitchell said, "The county council has been pretty conservative. Thank God it has been because otherwise, we wouldn't have been able to survive another year."
Lean times make one look at how you conduct business from a new perspective, she said, and try to find more cost-saving measures.
"The good side is that we've been frugal before, now the county has become even more cost aware," she said.
Like a horror story, however, there always is the unexpected when it comes to dealing with the state government. Mitchell said she's concerned more information could come from the state, from PERF or another source and throw another wrench into the machine. [[In-content Ad]]