The general fund is structurally balanced, meaning they don’t dip into reserves to balance, but the total tax budget isn’t. When you factor in all of the other revenues and expenses, from departments that operate on their own levies and or state and federal funding or revenue generators like water and sewer, the total proposed tax budget revenues are $368 million versus $393 million in expenditures.
County Administrator Charlie Young said after a levy has been in place for a number of years and as expenses rise, some, like the Developmental Disabilities board, need to use reserves to cover their costs. Levies are fixed dollar amounts, they don’t grow as the county does.
Keels asked everyone to hold the line on spending — including limiting raises to two percent — because there are several exterior pressures coming to bear on revenues.
READ MORE: Commissioners want help from legislature plugging a big budget hole
The biggest impact is fewer sales tax collections with the loss of Medicaid Managed Care sales tax. That means a $3.1 million loss to the county — $746,806 this year and $2.3 million next year.
Gov. John Kasich penciled in a lump-sum payment of $2.1 million to bridge the gap for the county, but that money can’t be used for operations. The commissioners recently implored their state legislators to fill the gap more permanently. Commissioner Don Dixon said he spoke to the House speaker recently and the matter is going to be addressed in some fashion.
“He was fairly confident there is going to be a solution to this, but he couldn’t say what for sure,” Dixon said. “I think we’ll get something, he seemed to think we had a shot at getting it all, but time will tell here in a couple weeks.”
READ MORE: Veterans board budgets 5 percent for salaries
Keels said while the Medicaid tax is going away she expects other sales tax revenues to grow some, so she is only anticipating a total loss of $1.36 million between this year and next, so she set the projection at $42.6 million. Total general fund revenues are anticipated to get an $800,000 boost from investment income, almost $300,000 in property transfer taxes and other increases, for a total of about $1.45 million in new general fund revenue.
Keels said there are still many variables to consider, including unknown future actions, like unfunded mandates from the state and federal governments, but she said she is conservatively estimating the county will have a $33.8 million cash balance in the general fund at the end of 2018.
Locally there are some unknowns as well. The veterans’ board budgeted higher than the two percent cap for raises next year because they are part of a large group of offices and departments participating in the Clemans Nelson Wage Study. The county has used the human resources consultant for a number of years to make sure they are on par with what employees in other governments and the private sector are earning. That study should be complete in August.
The veterans board pencilled in a five percent hike for salaries and President Chuck Weber previously told the Journal-News, despite the 2 percent directive, he still supports the five percent because he wants to make sure they budget enough money to pay their people according to what the new wage study might recommend.
“Just the idea we won’t be behind the eight ball when the wage study is completed and then we’re at a number that doesn’t satisfy what the deserved amounts are,” he said.
Commissioner T.C. Rogers said this very preliminary step in the budgeting process isn’t just about spending for next year.
“This is the budget for ‘18 but we don’t think of it as the budget for just one year,” he said. “We factor in what we anticipate in outgoing years, as much as five years out,” Rogers said. “So far we’ve been successful in winning those anticipations because the state budget and the federal budget can be wildly different from what we think.”
Highlights of the 2018 Butler County Tax Budget
The sales tax budget is a preliminary spending plan that will be fine-tuned throughout the remainder of the year.
Projected general fund revenues: $96 million
General fund expenditure requests: $99.4 million
Expected sales tax: $42.6 million
Cuts to be made: $3.3 million
Total revenues all funds: $368 million
Total expenditures all funds: $393 million
Source: Butler County Finance Department