Co. Budget Crunch is Lingering
Fayette County Commissioners Court met last Thursday, Aug. 3, to continue work on next year’s County budget.
Chief Appraiser Richard Moring of the Fayette County Appraisal District gave a report on property tax rates for next year. Moring calculated the No New Revenue Rate for next year at $0.39353 per $100 of taxable value. That rate would bring in roughly the same amount of property tax revenue as this year. The current tax rate is $0.44219. The highest rate that the Commissioners could set for next year without calling a special election, known as the Voter Approval Tax Rate, is $0.41196 per $100.
“(That’s) about three cents less than what we had last year,” Moring said at the meeting. “That will happen when you have almost a half a billion dollar increase in values.”
State law prohibits counties from increasing property tax revenue by more than 3.5 percent from one year to the next without calling a election for voter approval. Moring explained the calculation: “You take the same property, excluding new improvement value like new homes, garages, whatever – any kind of improvements, you take those numbers out to adjust the values to reflect the same properties as last year compared to this year,” Moring said. “You calculate the rate based on this new number. It’s more of an apples to apples comparison. You can only go 3.5 percent above that number. That’s how you get the voter approval rate.”
Pct. 4 Commissioner Drew Brossmann said constituents asked him whether the County could set the tax rate at the No New Revenue Rate plus the rate of inflation. But Brossmann said that would not be possible under state law.
“People asked if we would use the No New Revenue Rate and adjust the rest of the rate by how much inflation has gone up this year,” Brossmann said. “But the most we can come up is 3.5 percent. Inflation is way higher than that. So we would be way above that.”
The County Auditor’s Office calculated a total estimated revenue next year at $30,012,644.82 based on the Voter Approval Rate. That’s about $1.5 million more than the County expects to bring in this year. Budgeted expenses for next year so far stand at $30,960,528.54, more than $2 million over budgeted expenses for this year. That leaves an overall budget deficit of $947,883.72, with $787,623.24 of that amount in the General Fund.
(The General Fund includes most County departments such as the Sheriff’s Office, EMS, Recycling Center, County Clerk’s Office, County Attorney’s Office, etc. The four road and bridge precincts each have their own funds in the overall budget. The overall budget includes several minor funds as well, such as the law library fund, courthouse security fund, and the debt service fund.)
Commissioners did not discuss any major cuts to expenses at last Thursday’s meeting. The Commissioners must finalize a proposed budget by Thursday, Aug. 10, and file it for public inspection at the County Clerk’s office. Unless they decide to cut expenses at their next meeting, this would mark the second year in a row that the County has dipped into its fund balance to pay for operations. Plum resident William Bernsen, who ran for County Judge last year, criticized the County’s deficit spending.
“It appears to me that the County government is losing money fast,” Bernsen said. “This fund balance needs to go north. This is almost going to necessitate a giant tax increase next year to make up for these deficits. I believe we are a fiscally conservative County. What are y’all’s plans to deal with these giant deficits and get our fund balance back up?”
Bernsen noted that government accounting standards call for a fund balance that can pay for at least three months worth of expenses. He said the County’s current fund balance will only cover one and a half months of expenses.
“The biggest deficit in this budget is the (roughly) $787,000 in the General Fund,” said Pct. 1 Commissioner Jason McBroom. “We’ve got to figure out how to balance that.” EMS Director Josh Vandever said his department is on track to earn $300,000 to $400,000 more in revenue than expected this year, which could help to cover some expenses.
“That’s a fluid situation and you have to err on the conservative side,” McBroom said.
The budget presented last Thursday included a 10 percent raise for EMS and the Sheriff’s Office that the Commissioners Court had been discussing for the past two weeks. Other County employees would receive a five percent raise. At the meeting, Commissioners learned about a grant from the state could pay for raises at the Sheriff’s Office.