During a three-hour session Monday night, Sampson County commissioners said they wanted to see no tax hike or drop in services in the 2013-14 budget but said cuts would at least have to be considered with oncoming school construction debt, declining revenues and continued drops in state funding amounting to a nearly $500,000 shortfall facing the county.
At Monday night’s pre-budget work session, a budget impact summary highlights anticipated expenditures outweighing anticipated revenues by $471,360.
Finance officer David Clack estimated there would be nearly $400,000 reduction in revenue from Health Department fees and an approximately $300,000 reduction in ambulance fees, accounting for close to $700,000 in decreased revenues. “I’m a little bit alarmed at the under-revenues,” said Commissioner Jefferson Strickland. “Those two items are significant.”
“I don’t know that it’s going to be $300,000, but it is going to be a significant enough amount that we’re going to have to pull back on it,” said Clack, noting the type of ambulance calls as well as an increase in the number declining transport. “We do have more calls going to collections now than we have had before, that it’s going to take us longer to collect.”
Lowered revenues at the Health Department, expected to be about $100,000 short this year and increasing for 2013-14, are due to health care changes and modifications to Medicaid reimbursement calculations — “that one check represents 20 percent of (director Wanda Robinson’s) budget,” Clack said.
“Changing the way that is calculated, there looks like it’s going to be a shortfall and it’s going to be a pretty large shortfall,” said Clack. “I don’t know if it’s going to be $391,000, that’s just my first look at it.”
However, the lack of revenue leaves a gap in the budget that needs to be made up.
“Making cuts in other places (is) our only recourse,” the finance officer said.
The local lottery fund shortfall in Sampson, to offset school construction, will remain at $600,000, like it has in recent years. The funds, previously at $1.4 million, were expected to grow in subsequent years but instead declined to around $800,000 and stayed there. “It’s basically gone backwards,” said Clack. ADM monies, representing another $600,000, are expected to be taken permanently off the table. The county has been dealing with a lack of those funds for about six years.
“Those are shortfalls that don’t affect us in this year, in the year coming up or the next year, but they’re going to get us down the road,” said Clack, “unless we have a big jump in tax revenue or other revenues to help.”
One cent on the tax base represents $387,132.
“That is a significant event, but unfortunately I wish we would not have spent in the last couple budgets as we did, that’s just my humble solitary consideration,” said Commissioner Albert Kirby. “Like Commissioner Strickland, I’ve lost some sleep after I started looking at this in detail. This is going to be a tough budget. Looking at the hard reality of it all, people don’t want to see taxes, I don’t want to see taxes, but you can’t have your cake and eat it too. It’s going to take some creativity.”
In addition to estimated changed to revenues and expenditures, county manager Ed Causey included for commissioners a run-down of potential budget impacts and memos from several department heads pertaining to budget submissions.
“A few departments provided information about future potential needs which they did not necessarily include in this fiscal year’s request, but represent costs which may need to be considered to continue service at their current level,” Causey stated. “Several other departments are projecting some significant increased for this upcoming fiscal year.”
The $471,360 does not take into account departmental requests, but rather uses the current budget to gauge the impact of changes county staff knows is coming down the pipe and going forward into the 2013-14 fiscal year, Clack noted.
A formal budget presentation is anticipated for June 3.
Commissioner Billy Lockamy said times were tougher than they have been before.
“There’s just something a lot different now,” said Strickland. “I’m trying to figure out how we went from last year’s budget, setting aside $500,000 in extra contingency, putting money in the capital reserve (maintenance accounts) for the first time, we had a small pay raise (for employees), but using the same formula we’re coming up short for the coming year.”
He pointed again to the two items where revenue would be lost. Clack reiterated that those numbers were still subject to change, being rough figures. Kirby said the $700,000 in oncoming school construction debt from Roseboro Elementary School was the “game-changer.” Kirby said the $471,000 figure was still a lot, but Clack said the 2013-14 budget would not be the same as the current budget.
“It’s always a lot of money when we look at it now,” Clack said of the shortfall.”We’re not going to do (2012-13) this year. We’re going to do something different.”
Strickland pointed to unemployment rates in Sampson, which while improved, have not changed drastically from the 8.8 percent one year ago. “Difficult times are not over,” he said.
The board discussed significant budget impacts, touching on school systems, the community college, Economic Development and recreation services, as well as employee pay and requested special appropriations. There was no action taken during Monday’s session, but commissioners expressed their desire for no tax hike.
“It’s kind of hard to see it until I see everything else,” Kirby said. “We might look at some other budgets and be able to cut some stuff out. My hope is to keep the tax rate down and not have to raise taxes at all. Now, am I talking about cutting my leg off or cutting out a whole department? That’s what I have to see. How deep can the cuts be to prevent a tax increase?”
Causey said services would have to be cut, stating that “sending people home” was a big possibility. The phrase was meant in a larger way to refer to making sizable cuts, but jobs could very well be a part of that, he said.
“If having a tax increase is not on the table, then I have no choice but to send some folks home,” said Causey. “These numbers could be estimates but I don’t think they’re $471,000 off. I believe maintaining the status quo — if we got it to zero, we would be doing good. At that point in time, anything we add is going to be an increase to the budget and the money is going to have to come from somewhere.”
Lockamy said he believed it was a consensus the board did not want to see a tax increase. Commissioner Harry Parker agreed, stating that should be the last resort. If that was the marching order, Causey said, staff can be as considerate as possible to all requests, but the budget would likely not include anything extra.
“If my role is to slice and dice — I’m talking about eliminating people — I will be perfectly agreeable to doing that, but I don’t think the board is quite ready to do that. If we take the existing budget that we have presented, if we can pare those back and maintain the status quo, it is going to be a challenge to add any other stuff (not already in the budget). We just can’t propose what we can’t fund.”
Kirby said he wanted to see the worst-case scenario, but again said he did not want to see a tax hike. Both Kirby and Lockamy said difficult decisions needed to be made over the course of the next couple months.
“You have to look at people’s lives. You’re looking at sending people home and I have a heart; everyone sitting up here does,” said Kirby. “It’s easy to advocate no new taxes, but when you look at what the consequences could be, it’s tough.”
Strickland referred to the situation as a “crisis.” Parker said the county was at a crossroads. He did not want to see taxes raised either, but called on county staff to give commissioners options.
“I don’t want to raise taxes either, but you have to keep an open mind,” said Parker. “This is what we were sent here to do, is take care of this business for the county. It’s not going to please everyone, but we have to make decision for the best interests of the county.”
Lockamy said he appreciated the opportunity to see some budget numbers ahead of time and the chance for commissioners to give direction. He expressed that the board is trying to do its best and expressed confidence in the county staff in putting together a proposed budget.
“We have provided for the citizens of Sampson County and we want to continue to do so,” Lockamy remarked, “but we’ve reached the point where our backs are against the wall. We’re going to have to make some hard changes. I hope we can have the minds and the wisdom to do it the right way.
“I don’t see a change in the near future,” the chairman said. “That’s the scariest part to me. I don’t see any answers.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.