This week, the Ingham County Commission started our budget hearings. Each liaison committee goes through the recommendations of the County Controller with the Department heads. We have four liaison committees – Human Services, County Services, Law Enforcement, and Judiciary. We also have the Finance Committee, which reviews the proposals in full when the liaison committees are through and puts the budget together before consideration on the Board floor. I serve on the County Services committee and can recount that committee. My other committee is the Finance Committee, which I Chair. Finance will consider the budget in a few weeks.
The County Services committee was relatively easy, all things considered. Not one Department head complained about their budget allotment. I think that is the first time I have seen that in my 9 years on the Board! There were also no requests for funding from our Strategic Planning Fund, also called the Z-List (about $300,000 set aside in the budget for priority cuts to be restored). We had a discussion with the Drain Commissioner about some drains in Leslie and Onondaga and their assessments as well as about rain capacity in the drains and how they were overburdened by the immense amount of rainfall a few weeks ago. In essence, there is a drain that dates back to the WPA days that is not maintained by anyone, and it flooded. That caused about $300,000 worth of damage. The Drain Commissioner is going through the motions now to take over that drain at the request of the residents and is working with them on an assessment. We also discussed the Parks budget with the Parks Director. There are some complaints about the allocation of resources in the budget towards the zoo and that will likely come out in the Finance committee. We also heard public comment from the UAW about the proposed elimination of 13 vacant positions in the county budget (see below). They correctly pointed out that these eliminations will lead to others doing that work and being overburdened. I hope that we will be able to do something about that through the process.
Here is a preview of the 2012 Ingham County Controller Recommended Budget:
The budget is focused on the 2012 budget priorities and the long-term strategic planning objectives established by the Board of Commissioners. This budget would continue to assure accessible health care, support for public safety, assure judicial processing, encourage the use of appropriate sanctions for adult offenders, provide appropriate treatment and sanctions for at-risk juveniles, promote recreational opportunities, and foster economic well being.
The total recommended budget is $193.8 million, a $1.36 million or .71% increase from the 2011 adopted budget, but is artificially inflated because 2012 represents the first year the Delinquent Tax Revolving Fund (DTRF) is included as a part of the overall budget ($4.5 million increase). But for the inclusion of the DTRF, the overall budget would have decreased by $3 million or 1.5 %. The general fund budget is recommended at $71.5 million, a $2.35 million or 3.2% reduction from the 2011 adopted budget. 2012 will represent the fourth year in a row that the general fund budget has declined. The total property tax levy supporting the recommended budget will be 9.5463 mills. The proposed levies for County operations, 911, juvenile justice, Capital Regional Airport Authority, Potter Park Zoo, indigent veterans support, and Farmland and Open Space remain unchanged. The special transportation millage is increased slightly from a total of .4768 mills to .48 mills, due to the 2010 voter approved renewal which goes into effect for the 2012 budget year.
The single largest contributor to the County’s multi-year budget shortfalls is the decline in property tax values. Property tax revenues have traditionally accounted for approximately 60% of the overall general fund revenues. Property values declined for the third year in a row, and will likely continue to decline through fiscal years 2014. The recommended budget assumes that the property tax levy for county general operations will remain at 6.3512 mills. These operating levies will generate $41.34 million, a decline of $1.5 million or 3.5 percent, from the 2011 adopted budget.
In July, the Controller’s Office estimated the general fund shortfall for 2012 at $5.3 million. The shortfall is the difference between projected revenues and what it would cost to fund services at current year levels. Overall revenues were estimated to be $2.8 million below the 2011 amended budget. This includes a decrease of $1.5 million in property tax revenues, a $1.5 million reduction in state revenue sharing, and a $100,000 decline in department generated revenues. Overall expenditures were estimated to increase by $2.3 million in order to cover the cost of current services.
The general fund budget was balanced with a mix of targeted reductions and a $1 million increase in the use of unreserved fund balance. Please note that the solutions do not include the layoff of any county employee.
The solutions include but are not limited to the following:
• Increase in the use of unreserved general fund balance from $1 to $2 million
• Continue the hiring freeze and 8 week hiring delay - $435,000
• Assume a 1% savings associated with employee bargaining concessions - $480,000 general fund and $800,000 overall savings
• Elimination of 13 Vacant FTEs - $521,000
• Re-project Employee Health Insurance Costs - $232,000
• Liability Insurance Decrease in Premiums and Rebate - $208,000
• A $1.2 million reduction in the Health Department’s general fund appropriation
- Attrition savings - $400,000
- Increase Medicaid and Health Plan Management Revenue - $450,000
- Jail medical savings - $100,000
- Other - $245,000
• A reduction in the Parks general fund appropriation - $183,000
• Child Care Fund - Juvenile Delinquency Private Placement savings - $315,000
• Child Care Fund - Foster Care Private Placement savings - $210,000
• A reduction in controllable expenditures across the departments - $460,000
• A net increase in department generated revenues - $56,000
As we look ahead, we assume that property values will continue to decline with a corresponding reduction in property tax collections. Our Controller estimates that property tax collections will decline in fiscal years 2013 through 2014 by an additional $1.5-$2.5 million per year. State and federal revenue sources are also likely to decline, putting even more pressure on the County’s future budgets. Therefore, we will continue to plan ahead and implement long term cost savings ideas in order to get through the next few budget cycles without decimating our program priorities.
Despite all this bleak news, the County’s reserves remain steady. The general fund undesignated fund balance at the end of fiscal year 2012 is projected at $13.8 million and the Public Improvement Fund at $.8 million. The budget stabilization fund should remain at $10.6 million through 2012.
I hope this provides a good picture of the Controller’s Recommended Budget and what County Commissioners will be looking at for the next two months!