County Council Planning 2021 Budget While Keeping An Eye On Revenue Shortfall
August 13, 2020 at 2:25 a.m.
County Council Planning 2021 Budget While Keeping An Eye On Revenue Shortfall
By David [email protected]
The 2019 expended budget for all funds from every department was $35,779,602.
But with cuts still to be made and the Kosciusko County Council not scheduled to adopt the 2021 budgets until Oct. 8, there’s still time and opportunity for the 2021 figure to come down. And with revenues expected to be down next year for the county, the council is working to figure out how to provide its services with less money.
The county council had an all-day budget meeting Friday to hear proposals from the department heads.
In an interview Wednesday to discuss the budgets, County Auditor Michelle Puckett said, “Probably a couple of years ago was when they started having an extra budget hearing just between the council and the department heads because – on Aug. 17 we have our council meeting at 6 p.m. with the department heads that didn’t quite get enough time to ask questions and get answers before we were having to adopt the budget – so the council decided a few years ago to have an all-day thing on a Friday.”
Some departments, like the county commissioners, were given about an hour Friday because they have a lot of budgets and tax dollars in their funds. While the sheriff was given a half hour and the highway department was provided 20 minutes, other departments were allotted 5 to 10 minutes. No official action was taken Friday by the council. The department heads will go before council again Monday to provide a more abbreviated version of their Friday proposal.
“What that allows is that any questions the council had for them during our Friday meeting, gives them some time to do a little bit of homework, get them some additional information, allows the council to ask questions that we can get the answers for,” Puckett said.
The official advertised public hearing was moved from Aug. 20 to Sept. 10.
“Originally, when we started the budget process, the president of the council, Jon Garber, sent a note to everybody and said just because of our reduction in revenues and disruption in services because of COVID, he was wanting us to hold the line as much as possible in ’21,” Puckett said. “So as you’re going through and reviewing those budgets, you can see very few offices ask for anything in ’21 that they were not approved (for) in 2020.”
At the July council meeting, the council requested that at Friday’s meeting that everyone look at their budgets to see if there were any possible reductions for 2020 as well as any additional reductions they could make in what they requested for 2021. “So a lot of departments did supply us with that information,” Puckett said. Any cuts that the department heads propose for 2020 have to be presented to the council at 6 p.m. Thursday; those will be advertised; and the council will take official action on them at their September meeting.
Of the $48 million-plus total proposed for 2021, county general accounts for $27,806,511, an increase of $1,115,333 over 2020’s adopted county general budget of $26,691,178. The county general includes various budgets from all the departments.
Puckett said part of the $1.1 million increase is in the wages because a first step in the budgeting process is to advertise the budgets proposed. “Once we advertise, that is the maximum our budget can be. So for advertising purposes only, the instruction we’re given is to take all personnel, all wages, and add 5%. So that way we’re advertising high, and then, of course, during the budget process, the council backs down to what actual wage increase that we’ll receive. Sometimes it’s 1%, sometimes it’s 2, sometimes it’s none,” she said.
The COVID-19 pandemic has affected the revenue streams for all levels of government. The county is trying to budget for next year based on guidance it’s been given to date.
“What we’ve been given right now is, our revenue stream that’s going to be affected in 2021 are our income taxes – our (County Option Income Tax) and our (Economic Development Income Tax). So since those are collected based off on income, we know there were a lot of people out of work during COVID, the state has told us to anticipate a 10 to 15% decrease in our COIT revenues. So that’s going to be at least $1 million in our general fund of reduced revenues,” Puckett said.
Also, because of COVID and the economy, the interest rates have gone down “dramatically,” she said. “So, projected for ’21 we’re going to lose about another $1 million in interest that typically we would have received from the bank because they’re holding all of our monies. So just because of the interest reduction and the income tax reduction, it’s looking like a $2 million reduction for 2021. Those are our main ones.”
Puckett said the property tax base has not been hit yet, but it’s possible businesses have been shut down during COVID pandemic and they could appeal their tax assessment. “And if so, that would affect the tax dollars and the tax rate we bring in, but that is still an unknown,” Puckett said.
One of the funds for the highway department is the Motor Vehicle Highway, which she said the county has a few issues with.
“On the MVH specifically, their revenues were hit immediately. We saw a reduction in their revenues starting as soon as April, if not May. And part of their reductions, one month we saw a 35% decrease from the previous year because those are based off on cars physically driving on the road and those estimates, and we know that during the stay-at-home order, lots of people stayed home,” Puckett said.
She said they’re looking at different reductions and Highway Superintendent Steve Moriarty is working with the council and commissioners, reviewing their budgets to see if or what cuts can be made. The county general does have a “location in their budget that helps the highway department out,” which is going to be important this year because “of their immediate lack of funding.” She said hopefully a good thing about the highway is that since they were hit so immediately because of the traffic flow and gas tax, those revenues “should recover quickly.”
The Department of Local Government Finance has given the county a projection of an 18% decrease in the highway funding for 2021. “So even though we know it’s going to come up, it’s probably not coming up as quickly as we were hoping,” Puckett said.
The county wheel tax has not been affected, though it was down and delayed when the Bureau of Motor Vehicles was closed due to the pandemic. Puckett said she believes that everything with the wheel tax is caught up at this point.
“I think the big thing that everybody hopefully will be sympathetic and understanding is, this has truly been a year like no other for county government, for city government, for all of our constituents as a whole,” Puckett said. “We’re spending, I would say, twice as much this time reviewing the budget as we ever have before. Every time we turn there’s issues or new things that we need to talk about. We’ve pulled some consultants in from time to time and just really to get the best picture possible for the overall county health. We know that there are cuts that are going to need to be made because of the reductions in revenues. And the task that we have given the council is, how do you balance reductions in services with coming back to meet a balanced budget? So that’s going to be the challenge this year.”
All county meetings are open to the public and are advertised in the newspaper and can be found online on the county’s website at kcgov.com. “We want public interaction, we want feedback, we want them to feel included. So any time they have a question, they’re more than welcome to attend those public hearings,” Puckett said.
The 2019 expended budget for all funds from every department was $35,779,602.
But with cuts still to be made and the Kosciusko County Council not scheduled to adopt the 2021 budgets until Oct. 8, there’s still time and opportunity for the 2021 figure to come down. And with revenues expected to be down next year for the county, the council is working to figure out how to provide its services with less money.
The county council had an all-day budget meeting Friday to hear proposals from the department heads.
In an interview Wednesday to discuss the budgets, County Auditor Michelle Puckett said, “Probably a couple of years ago was when they started having an extra budget hearing just between the council and the department heads because – on Aug. 17 we have our council meeting at 6 p.m. with the department heads that didn’t quite get enough time to ask questions and get answers before we were having to adopt the budget – so the council decided a few years ago to have an all-day thing on a Friday.”
Some departments, like the county commissioners, were given about an hour Friday because they have a lot of budgets and tax dollars in their funds. While the sheriff was given a half hour and the highway department was provided 20 minutes, other departments were allotted 5 to 10 minutes. No official action was taken Friday by the council. The department heads will go before council again Monday to provide a more abbreviated version of their Friday proposal.
“What that allows is that any questions the council had for them during our Friday meeting, gives them some time to do a little bit of homework, get them some additional information, allows the council to ask questions that we can get the answers for,” Puckett said.
The official advertised public hearing was moved from Aug. 20 to Sept. 10.
“Originally, when we started the budget process, the president of the council, Jon Garber, sent a note to everybody and said just because of our reduction in revenues and disruption in services because of COVID, he was wanting us to hold the line as much as possible in ’21,” Puckett said. “So as you’re going through and reviewing those budgets, you can see very few offices ask for anything in ’21 that they were not approved (for) in 2020.”
At the July council meeting, the council requested that at Friday’s meeting that everyone look at their budgets to see if there were any possible reductions for 2020 as well as any additional reductions they could make in what they requested for 2021. “So a lot of departments did supply us with that information,” Puckett said. Any cuts that the department heads propose for 2020 have to be presented to the council at 6 p.m. Thursday; those will be advertised; and the council will take official action on them at their September meeting.
Of the $48 million-plus total proposed for 2021, county general accounts for $27,806,511, an increase of $1,115,333 over 2020’s adopted county general budget of $26,691,178. The county general includes various budgets from all the departments.
Puckett said part of the $1.1 million increase is in the wages because a first step in the budgeting process is to advertise the budgets proposed. “Once we advertise, that is the maximum our budget can be. So for advertising purposes only, the instruction we’re given is to take all personnel, all wages, and add 5%. So that way we’re advertising high, and then, of course, during the budget process, the council backs down to what actual wage increase that we’ll receive. Sometimes it’s 1%, sometimes it’s 2, sometimes it’s none,” she said.
The COVID-19 pandemic has affected the revenue streams for all levels of government. The county is trying to budget for next year based on guidance it’s been given to date.
“What we’ve been given right now is, our revenue stream that’s going to be affected in 2021 are our income taxes – our (County Option Income Tax) and our (Economic Development Income Tax). So since those are collected based off on income, we know there were a lot of people out of work during COVID, the state has told us to anticipate a 10 to 15% decrease in our COIT revenues. So that’s going to be at least $1 million in our general fund of reduced revenues,” Puckett said.
Also, because of COVID and the economy, the interest rates have gone down “dramatically,” she said. “So, projected for ’21 we’re going to lose about another $1 million in interest that typically we would have received from the bank because they’re holding all of our monies. So just because of the interest reduction and the income tax reduction, it’s looking like a $2 million reduction for 2021. Those are our main ones.”
Puckett said the property tax base has not been hit yet, but it’s possible businesses have been shut down during COVID pandemic and they could appeal their tax assessment. “And if so, that would affect the tax dollars and the tax rate we bring in, but that is still an unknown,” Puckett said.
One of the funds for the highway department is the Motor Vehicle Highway, which she said the county has a few issues with.
“On the MVH specifically, their revenues were hit immediately. We saw a reduction in their revenues starting as soon as April, if not May. And part of their reductions, one month we saw a 35% decrease from the previous year because those are based off on cars physically driving on the road and those estimates, and we know that during the stay-at-home order, lots of people stayed home,” Puckett said.
She said they’re looking at different reductions and Highway Superintendent Steve Moriarty is working with the council and commissioners, reviewing their budgets to see if or what cuts can be made. The county general does have a “location in their budget that helps the highway department out,” which is going to be important this year because “of their immediate lack of funding.” She said hopefully a good thing about the highway is that since they were hit so immediately because of the traffic flow and gas tax, those revenues “should recover quickly.”
The Department of Local Government Finance has given the county a projection of an 18% decrease in the highway funding for 2021. “So even though we know it’s going to come up, it’s probably not coming up as quickly as we were hoping,” Puckett said.
The county wheel tax has not been affected, though it was down and delayed when the Bureau of Motor Vehicles was closed due to the pandemic. Puckett said she believes that everything with the wheel tax is caught up at this point.
“I think the big thing that everybody hopefully will be sympathetic and understanding is, this has truly been a year like no other for county government, for city government, for all of our constituents as a whole,” Puckett said. “We’re spending, I would say, twice as much this time reviewing the budget as we ever have before. Every time we turn there’s issues or new things that we need to talk about. We’ve pulled some consultants in from time to time and just really to get the best picture possible for the overall county health. We know that there are cuts that are going to need to be made because of the reductions in revenues. And the task that we have given the council is, how do you balance reductions in services with coming back to meet a balanced budget? So that’s going to be the challenge this year.”
All county meetings are open to the public and are advertised in the newspaper and can be found online on the county’s website at kcgov.com. “We want public interaction, we want feedback, we want them to feel included. So any time they have a question, they’re more than welcome to attend those public hearings,” Puckett said.
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