Commissioners eye major budget cuts: Even with sizable cuts, a tax increase appears inevitable
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The budget as presented includes a 3 percent across-the-board raise for county employees.
However, plans are already in the works to hold emergency committee meetings, beginning this week, to make extensive budget cuts in an effort to come up with an alternative budget in time to present it, along with the approved budget, at the Aug. 21 meeting of the full county commission.
After hearing a list of 2005-2006 tax rates in neighboring counties, Budget and Finance Committee chairman George Smartt acknowledged the new rate would give the county a dubious distinction.
?This would put us at the head of the pack,? Smartt said.
Commissioner Ken Martin stated the obvious.
?Mr. Chairman it sounds like we?ve got some work to do,? Martin said. ?Our commission is not going to pass a 75-cent tax increase.?
But the goal of avoiding a tax increase of any kind for another year is becoming less attainable, considering ever-rising fuel costs and state-mandated increases. Smartt brought up the problems with the Alaska pipeline and the potential for even higher oil prices.
?As the various departments look at their fuel costs they need to be much more cautious now than when they made their first proposal,? Smartt said.
The commission has several points to consider. According to Smartt, the 3 percent raise for county employees will amount to around $175,000, although this amount would have been considerably higher had the originally requested departmental raises been approved.
The state-mandated increases, along with some other required expenses, are even more problematic, since the commission has no direct control over these.
Smartt asked director of accounts Linda Hillis to go over these amounts.
?When we talk about state-mandated increases, we have the retirement, which went up, and we?re looking at around $75,000 there,? Hillis said. ?We?ve also got salary increases that are mandated for elected officials, and that?s probably going to be close to $30,000.?
In addition, the drop in what 1 cent of property tax generates, from $48,406 to $48,101, amounts to a loss of around $54,000 in revenue for the year, another situation over which commissioners have no control.
?We also have animal control in this year?s budget,? Hillis said. ?Which didn?t start out in last year?s budget. That?s $59,150. We are going to have additional surety bonds to pay on newly elected officials this year, so I think that is probably going to run about $9,000 more than last year.
?And there?s $38,000 in repairs to the courthouse that have already begun,? Hillis added. ?And I?ve also added six more medical insurance amounts for the new commissioners at $2,700 per year, that?s $16,200.?
Those seven items totaled more than $281,000, or around 6 cents of property tax. Hillis said the budgets would have to be looked at closely in order to come up with an increase the commission could live with for the 2006-2007 budget.
?I think there?s been some discussion about going back to last year?s budget,? Hillis said. ?But we can?t really do that because we?ve got these items that are state-mandated increases. So we can?t go back to last year?s budget. We can go back to last year?s budget plus the mandated items, plus the revenue that we?re losing.?
While commissioners agreed the chance of avoiding an increase of some sort are slim, no one would hazard a guess as to what that increase might be. Smartt said that figure could only be determined after the relevant committees took the budgets back and made their cuts.
?We?ll just have to see what it is then,? he said.
Tax hikes
Here are three examples of how tax increases would impact local homeowners, depending on home value:
$50,000 house
Tax increase Annual cost
25 cents $31
50 cents $63
75 cents $94
$100,000 house
Tax increase Annual cost
25 cents $63
50 cents $125
75 cents $188
$200,000 house
Tax increase Annual cost
25 cents $125
50 cents $250
75 cents $375