Although a dip in pension obligations is a welcome relief, Jefferson County still will have to navigate a minefield of expenses in a year when sales tax revenue dropped significantly from projected amounts.
Retirement benefits and health care costs have stabilized, but highway, payroll, education, inmate boarding, indigent defense funding and social services all threaten to blow the bottom line as the county moves into budget season, according to Scott A. Gray, R-Watertown, chairman of the Jefferson County Board of Legislators Finance and Rules Committee.
We have a lot of these competing priorities, a lot of competing costs we dont have a choice in ... and with revenue down, theres a lot of pressure, Mr. Gray said.
In July, Mr. Gray told legislators that quarterly sales tax revenue was down by nearly 2 percent compared with the same period last year and that the county was projecting a revenue shortfall of $538,226 to $817,328 by years end.
During the last budget cycle, the Legislature unanimously approved a $244,108,186 spending plan that called for a 2.2 percent increase in the tax levy, or amount to be raised by taxes.
The tax rate rose less than 1 percent, going from $6.37 per $1,000 of true value in 2012 to $6.43 per $1,000 in 2013. As a result of the adopted budget, the average taxpayer with a property whose true value was $100,000 saw a tax increase of $6.
County Administrator Robert F. Hagemann III originally had proposed a 4.4 percent increase in the levy that would have raised taxes on a house valued at $100,000 by $19, but legislators were able to cut that in half, largely by taking a more optimistic view of sales tax revenue than Mr. Hagemann had.
Mr. Hagemann projected about $34 million in sales tax revenue in 2013, while the budget adopted by legislators contained $250,000 more in expected sales tax revenue than Mr. Hagemanns proposal.
But now, instead of getting more than they expected, legislators may end up working with substantially less, causing some to question the wisdom of relying on sales tax revenue to balance the budget.
Sales tax as a source of increasing revenue is not workable, Mr. Gray said in July.
Managers have begun turning in their department budgets, though legislators wont get a good look at the proposed budget for 2014 until sometime in October, when Mr. Hagemann and his staff present it to the board.
There are several projects that may present challenges as the budget is put together, including: paying for the growing cost of boarding inmates elsewhere because of the countys overcrowded jail, paying for a proposed $15 million overhaul of the countys aging public communications system, and paying for several proposed highway projects that officials are asking be moved up on the priority list.
Though costs associated with boarding inmates at other facilities around the state show no signs of diminishing, the practice is still cheaper than building an addition at the Metro-Jefferson Public Safety Building, Mr. Gray said.
Jefferson County is applying for a grant from the state to help offset the cost of upgrading its communications system, but the maximum grant it can receive from the state is $6 million, leaving it on the hook for $9 million.
And the County Highway Department is asking for a budget increase similar to what it asked for last year, according to County Highway Superintendent James L. Lawrence, Jr.
It did not receive the money last year, but Mr. Lawrence said he is more optimistic this time around because roads have deteriorated even more.
Every year the need becomes more critical, he said.
But his request still may not be granted.
Some still feel were not adequately funding highway. The issue is going to be: theres not any money this year, Mr. Gray said, adding that any requests for additional funding likely will have to be accompanied by requests to raise taxes.
Legislator Philip N. Reed, R-Fishers Landing, chairman of the boards General Services Committee, which oversees the budget of the Highway Department, took exception to Mr. Grays assessment of the situation.
According to Mr. Reed, the county will save more money in the long run by maintaining the countys roads before they slip from good to fair to poor.
We are going to end up paying a lot more money to rebuild than to repair a road and we should acknowledge that and act accordingly, Mr. Reed said. Its premature to say that were going to throw a bunch of money at it and raise taxes.
There are other options, Mr. Reed said, including revising the countys six-year highway capital plan and tapping into the countys reserve fund.