07/02/09 — County's wait begins for news on final budget

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County's wait begins for news on final budget

By Steve Herring
Published in News on July 2, 2009 1:46 PM

Wayne County entered the new fiscal year Wednesday with a $157.6 million budget that is already frozen -- all capital, all jobs until further notice.

Hammered by shrinking revenues -- sales tax receipts are expected to be down by close to $2 million -- and uncertainty as to what hits can be expected from a state government battling a nearly $5 billion revenue shortfall, the county was still able to balance its budget without a tax increase.

It also was able to do so without layoffs or furloughs, possibly.

"Unfortunately, if the state and federal governments reduce funding to counties, all aspects of county operations are on the table for possible reductions or changes," County Manager Lee Smith said this week.

That uncertainty will linger for months -- the state isn't expected to adopt its budget until later this month at the earliest and the federal budget won't be approved until October.

"I am going to watch (state budget) amendments to the very end," Smith said. "Now you are getting these little conferees, these committees. Things go in the back room and they get negotiated, and that is where things happen. That's why the e-mail went out to all the staff last week -- all capital, all jobs, everything is frozen until further notice. I heard this (from employees) when I sent it out, 'So what else is new?'

"It has been that way for three or four years, that is how we have done business. But I think it is even more serious this year because revenue has fallen. I think we have seen it flatten out slightly."

Smith has said a conservative approach to estimating revenues and paying as it goes have helped the county be better-prepared to weather the current economic downturn.

"We can all hope and pray it will turn around, but I do not think they will ever be what they were," he said. "I don't think that's altogether a bad thing.

"I think they have learned to live within their means. I mean we all, I mean everybody, was living on top of the mountain for a while. Now we have come down and gone 'wow.' It is painful. For government it is really painful because we are the ones who are having to pick up the stuff that is broken."

The state and federal governments are "flying blind," he said.

"But I think that we tried to leave enough room within our budget that if we have some other issues from the state and federal governments that we can absorb them, but I can't guarantee that though," Smith said.

"I basically told employees that I cannot guarantee anything July 1. I know what it (budget) says here today. We didn't do furloughs. We didn't do layoffs. However, I will do everything in my power with the budget to cut what we can to do what we have to do to try and maintain services because we still have people show up on our doorsteps."

Smith and his staff worked on the budget while keeping an eye on what was transpiring in Raleigh. It was made somewhat easier by local legislators whom Smith praised for keeping the county informed about bills that would affect the county and its budget.

Some of the bills stalled, such as one that would have transferred the cost of secondary road construction and maintenance to counties. In some instances, it was gubernatorial or legislative edict and not bills that threatened the bottom line.

For example, Gov. Beverly Perdue took lottery funds set aside for school construction to help balance the budget putting the county's schools project in limbo.

"I am still curious about schools and what is going to happen there," Smith said. "It sounds better than it did."

Also, Smith had hoped the state would relent on restrictions as to how 911 revenues could be utilized including on the county's new radio system. It didn't.

Knocking his hands on his wooden desk, Smith said, "One thing I am very thankful is that they have left Medicaid alone. That's pretty much been kind of a hands-off, but I think they know how devastating it would be. It would destroy counties. It would be the final straw. You'd have counties that would have to declare bankruptcy."

Budget uncertainties are not limited to local boards, he said.

The state is in somewhat of the same predicament, Smith said, because it does not know about a lot of federal programs.

"You don't know," he said. "When we said we are flying blind, I think we really are. If they (state) set a budget and start moving forward and start spending money July 1 or the middle of July what is going to happen when the federal government cuts them?

"Granted everybody screams cut all of these programs. OK, what are you going to do? What happens when somebody shows up on our doorsteps that is sick? We have an obligation to treat them. Wayne Memorial Hospital, if somebody shows up there they have an obligation, within certain parameters, to serve people. How much can they do it without being paid? Not for long. Somebody has got to pay the bill."

It is easy to speak in generalities, he said.

Smith said he had spoken to man last Friday who talked about giveaway programs for the county, state and federal governments.

"I understand what he was talking about -- people who should be working who are getting the services," Smith said. "I said one of biggest problems is that because the federal government has come in and taken away a lot of our ability to ask for Social Security numbers or ask for certain records, even your tax records, if you come in with information, then I have to accept in many cases that you are being truthful. Are you? I don't know.

"I think it is easier to commit fraud, but yet we can't ask for certain information any more. So the federal government really helped to stop our ability to be productive in making sure that the people who are getting services are legitimate and are truly meeting the criteria to be eligible."

Smith said he understands privacy acts.

"But I think as government we ought to have the ability to check certain records because people are demanding that we check fraud and make sure that people are eligible and every single day that slips away from us," he said.

"It is hard to check and it causes a tough spot for our employees because they are having to make judgment calls."

"July 1 is just another day," he said.

But he added, "We are going to hold our breaths. I am going to hold my breath until the end of Oct. It is going to be lean and mean through October and November at a minimum and that is going to be tough for some things that we really need to be doing that we can't."