08/11/09 — County budget not set in stone

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County budget not set in stone

By Steve Herring
Published in News on August 11, 2009 1:46 PM

Wayne County's $157.6 million budget, frozen the day it went into effect, could absorb up to a half million dollars in state and/or federal cuts before forcing county officials to "tweak" its numbers.

Meanwhile, state lawmakers who passed a budget only last week were still in Raleigh Monday tinkering with the document, adding another $7 million in various projects.

County Manager Lee Smith had warned commissioners last week not to relax just because a state budget had been adopted. He noted that legislators would remain in session for a while longer and that anything could change.

In a Monday interview, Smith cited the last-minute addition of nitrogen runoff rules for Jordan Lake as the kind of issue that could add to local government's financial burden.

Even with a state budget in place the financial landscape remains somewhat murky and questions remain as to how the county's budget will fare, he added.

Complicating the issue even more is that a final federal budget remains months away.

"Right now, in looking at the first hits, I'm saying $300,000 probably, but we have enough (budget) freezes in place that I could handle up to a half million dollars fairly painlessly," Smith said. "It would mean a lot of things we would like to do or want to this year we that we won't."

Smith said he would be surprised if the hits exceeded a half million dollars. Those potential loses do not include the more than $3.6 million in lost sales tax revenues.

One known area the state plans to eliminate is the $18 per day it pays the county to house jail inmates. Depending on the jail population, the decision could cost the county between $75,000 to $100,000 a year.

The rub is that the state has not indicted when the change will become effective.

Also, the county already has been forced to allocate $40,000 for the women's shelter to replace lost funds.

However, the biggest hits are yet to come, and are expected primarily in health and social services.

It will take at least the first quarter, Smith said, to see "if we have to survive $300,000 or $400,000."

"We have frozen a lot of (budget) line items," he said. "Jobs have been frozen as well so I can make up the difference, if I need to, in the operation budget. I would say up to a half million dollars then I would have to start tweaking the budget and hopefully we won't find more than that, but anything is possible with the state and federal budgets."

Some state money depends on federal money, Smith said.

"I think that you are going to see some freezes up there," he said. "The thing I am really going to watch are reimbursements, when you get them, how you get them because you are seeing changes.

"Some reimbursement years ago you got within 30 days then they went 60, 90, 120 and now some are six to eight months. What is that going to mean? Sometimes that requires money to be moved to the next fiscal year and you have to book it as a receivable."

Those reimbursement issues are mostly likely going to affect the Health Department and Department of Social Services and some administrative areas, Smith said.

Smith said he has spoken with health and DSS officials who are unsure of what to expect.

It is possible that when the federal budget is finalized in October or later that the county could find out that some of the programs have either changed or no longer exist.

"I have talked to some in health and DSS and we don't know yet," Smith said.

Smith said that as a county manager he hated to say "I don't know" when asked about what to expect.

Smith is hopeful that state lawmakers will not repeal vehicle tax legislation scheduled to begin next year. The bill would require people to pay their vehicle tax when they renew their vehicle registration.

Currently there is about a three-month lag time between when the registration is renewed and a person receives a tax bill. Collection of vehicle taxes runs slightly over 85 percent compared to more than 97 percent for property taxes.

Once the tax is delinquent the county can place a block on a person renewing their vehicle registration the following year. The block is removed once the tax and interest are paid.

Medicaid is another area of concern for Smith.

"Medicaid could change and the state could get hit with a different cost, more or less, and you have got to remember Medicaid is state mandated first and the state is taking it on," he said.

Smith was referring to the state assuming the counties' share of Medicaid costs in exchange for the counties' 1/2 cent Article 44 sales tax revenues.

"Our saving grace over the last 24 months in our budget has been the state assuming responsibility for Medicaid," Smith said. "Granted the county took a (sales tax) revenue hit, but they (state) took $8.4 million of our cost and that helped us absorbs some of these hits and additional costs over last two years."

Had that not have happened a combination of lost revenues and Medicaid costs would have left some counties on the verge of being broke, he said.

"It would have really been bad," he said. "I am thankful at least for that."

Wayne County's budget is roughly 3.2 percent less than the 2008-09 budget and maintains the tax rate at 76.4 cents per $100 of value. Property taxes account for $48.6 million, roughly 71 percent, of the general fund revenue base of $68.9 million.

Smith has said Wayne has positioned itself to be in a "safe place" compared to many other counties by being conservative in revenue estimates and controlling operational costs.

A savings of $14.3 million has been realized over the past four years by not filling vacant job positions and has reduced the number of positions by a net of 110.