Grim Fiscal Projections Face County
SNOW HILL - Approximately $6.2 million needs to be cut from Worcester County budget requests to stay in line with projected revenue for fiscal year 2010 (FY10).
After months of estimations and uncertainties, it was revealed this week that the county's revenue for FY10 is estimated to be about $175.6 million, while budget requests of $181.8 million have already been fielded.
'What we budgeted for '09 is not going to match what's coming in,' said Commissioner Bobby Cowger.
Consequently, as a result of a directive for the County Commissioners, all county departments have cut their budget requests for FY10 below what they actually received for the current fiscal year.
'Your departments have cut $7.7 million from the requested budget over the current year,' reported county Administrator Gerry Mason.
Last year, the county operating budget encompassed $189.5 million when approved, a difference of $13.9 million in revenue over the two years.
Revenues are down because property assessments, and therefore property tax income, have fallen dramatically. Income tax revenue is down as well since unemployment is up. Tax revenue from real estate sales is also down, as is income from permits, licenses and other county fees associated with development. The state highway user tax revenue has been reduced, and state and federal grants have decreased.
The details of how the County Commissioners will handle the large discrepancy between requests and available money is unclear.
'Furloughs or layoffs have not been included in the budget because they're your purview, not your department heads,'' Mason told the commissioners Tuesday.
If the county's request to waive the Maintenance of Effort school funding requirement is successful, the 3-percent cut from the schools budget could save another $1.8 million.
One remedy the county cannot count on is a prior year surplus to carry into the new fiscal year. The actual number is uncertain, but Worcester staff affirmed that any surplus would be used to take care of an expected current year revenue shortfall.
Staff could not say what kind of shortfall the county could expect for the current fiscal year. According to Mason, staff is still going over February numbers to try and determine that figure.
'We just don't have the data to project out,' said Treasurer Harold Higgins. 'There's just too many variables out there.'
Commissioner Virgil Shockley stressed the need for that figure soon, saying, 'I just don't want to get blindsided.'
'We think that we're going to make it based on what we know right now, but there's not going to be any left,' said Mason.
There will not, however, be a positive variance, staffers feel.
'I don't think you'll have the money. There will be no carry over,' Mason said.
The 2 percent set aside from fiscal year 2009 operating budgets, as commanded by the County Commissioners in September, will help with revenue shortfalls this year, officials said.
'It would help balance fiscal '09,' said county budget officer Kathy Whited.
That 2-percent reserved against the end of FY09 will probably not cover the anticipated shortfall, staff said.
While Mason said Tuesday that he did not know how many county departments had actually set aside 2 percent of their operating budgets as instructed, Shockley confirmed later that most had.
The Worcester County Board of Education did not set aside 2 percent in September, according to Board of Education Financial Officer Vince Tolbert.
The school board voted in mid-July 2008 to create a $1,260,000 contingency fund against future cost overruns, to forestall a return to the commissioners to ask for more money to pay over-budget utility and special education costs, as has happened several times in recent years.
'The 2 percent is that money. We didn't consider setting aside an additional 2 percent. We took that action in July,' Worcester Superintendent of Schools Jon Andes said.
Andes added that some of that money has already been used for excess utility costs and private duty nursing and other services for special education students. The balance of those contingency funds will carry over into next fiscal year for overruns.
The commissioners asked the school board to create a contingency fund last summer after an acrimonious argument over substantial overrun assistance and when it should have been requested.
The school board will not need to approach the commissioners to handle overruns this year, Tolbert said.
The public budget hearing will be held on May 5, at 7 p.m., in the Snow Hill High School auditorium. Residents will be given an opportunity to comment on the proposed budget. Historically, public education has dominated the discussion at this hearing, and this year should prove no different. The commissioners will approve the budget June 2.
'Your work is cut out for you,' Mason told the commissioners.