This week was very quiet for the Board. As such, I would like to devote some time to discussing the budget. County staff will presented it to us at the end of August and early September. As you know (if you are a faithful reader of the Schor County Blog), the county is looking at a deficit of $7-8 million for the 2011 fiscal year, which starts in January. So why is it that we have that deficit? That gets asked often. The easy answer is that we have reduced property values which lead to less tax collections, as well as less interest income. At the same time, we have increasing expenses. That adds up to a deficit. But lets dig into that a bit more.
First let’s look at revenues that the county collects. In 2011, the county is expecting to collect $42.9 million in taxes. We are expecting to receive $9.3 million in intergovernmental transfers (transfers from cities, townships, etc. to the county). County Departments are expected to generate $20.8 million in revenues. We are also planning to use $1 million from our fund balance (rainy day fund). That is a total of about $74 million. All-in-all, these collections are $4.6 million less than the county collected in 2010 ($2.9 million less in taxes, $231,000 less in transfers, $147,000 less in department generated revenue, and $1.3 million less used from the general fund).
For fiscal year 2011, we are expecting county expenditures to be $80.4 million, which is $1.9 million more in expenditures than fiscal year 2010. That is about $6.5 million less in expected revenues than we have in expected expenditures (which includes the already-projected use of $1 million from our rainy day fund).
Why do we have $1.9 million more in expenditures in 2011 than we had in 2010? Here’s why…
1. In 2010 we had 3 furlough days for almost all employees. We have not figured any furlough days into the 2011 budget because we have not yet instructed county staff to negotiate this with the labor unions. That equals an additional $358,000 in expenditures than we had in 2010.
2. There is a 1% pay raise built into county employee contracts for 2011. Most contracts are in the final year of their cycle, so these will all be renegotiated for 2012 and beyond. But for 2011, the agreed-upon pay raise will cost $360,000.
3. We have an increase of $210,000 in employee fringe costs for 2011 (again, as per contracts).
4. The Friend of the Court and Prosecuting Attorney fiscal year change will cost us $185,000.
5. We have not yet implemented any hiring delays or hiring freezes for 2011. We have done that for the last few years, but not implementing those for 2011 would cost $953,000.
6. DHS foster care will cost an increased $253,000. This is due to new state mandates.
7. We always build in $300,000 to our budget for things that were not included in the budget, called strategic planning initiatives.
8. There is a drain tax at large increase from the Drain Commissioner’s office, which will cost $78,000.
We also have some items that will cost less in 2011. They are:
1. State ward cost decreases in the Family Court reduced by $350,000.
2. Community Mental Health reductions of 5%, saving $108,000.
3. Reduced costs for the clerk due to a 2011 being a non-election year for the county, which will reduce clerk costs by $160,000.
4. Debt service reduction savings of $277,000.
Add to this about $80,000 in other random costs, and you have the $1.9 million in expenditures.
So there it is. That is what we are looking at as we start our budget. Now we will see what the recommendations are from county staff to close the gap. I expect recommendations of more hiring freezes and furlough days, and other creative ideas. But we will see. Stay tuned…
Election Update: This is the final election update until the general election kicks into high gear. As you probably already know, I was victorious in my primary election!!! After a vigorous campaign knocking doors, doing mailings, running an absentee voter program, and continued constituent contact, I captured 83% of the total vote in the Democratic primary. Voters were not persuaded by the negative claims made by my opponent and expressed to me, over and over, that they like the job I am doing and want me to continue fighting for the residents of SE Lansing. Thanks to the voters of the 5th County Commission district. I also can’t express enough my deep appreciation for those who helped me on the campaign trail (knocking doors, lit drops, donating, letters to the editor, etc). I take it very seriously that the voters in the Democratic primary have again entrusted me to advocate for them when important county decisions are made. Now I will match up against my Republican opponent. I have met him once, and he seems like a nice and sensible guy. We will compare our records, philosophies, and ideas moving forward, and I am confident that voters will again choose me to represent the district and move Ingham County forward for the next two years.