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Posted: March 2, 2011 12:00 a.m.

Newton County reserves low

The economic downturn apparently hit Newton County much harder than surrounding counties and similar-sized counties around the state.

The total value of all land, motor vehicles and business equipment and inventory in Newton County has dropped 20 percent since the peak year of 2008. Houses are worth less and businesses have less inventory than two years ago.

By comparison, values in Morgan, Rockdale and Walton counties have dropped 12.79 percent, 9.4 percent and 8.1 percent respectively. Other similar counties have also had much smaller drops, for instance, a 10.8 percent decline in Floyd County, 5.4 percent in Bartow and unchanged in Doughtery County.

There are a myriad of reasons for the disparities. Some counties didn’t experience the explosive growth Newton did and don’t have the accompanying foreclosures. Other tax assessor’s offices may not have been as diligent about devaluing properties to reflect the market. Or, some counties may have their drop coming this year, as Chairman Kathy Morgan said some counties were predicting close to 20 percent declines.

The bottom line is that Newton is hurting, based on the numbers presented by Newton County auditor Wayne Tamplin, an accountant with Treadwell, Tamplin & Co. He discussed Newton County’s fiscal year 2010 financial audit with the Board of Commissioners at their annual retreat Saturday.

Newton County has seen its budget decline from $55.1 million in 2008 to the $46.3 million budget approved last year, while its reserve fund balance has dropped precipitously from $14.47 million to $6.44 million.

The county’s fund balance stands at 9 percent of its total budgeted revenue, which means if revenues declined significantly or collections were somehow delayed, the county could find itself in a financial emergency. To avoid such problems, governments generally aim for a fund balance of 20 percent.

"If times improve, we need to get back up to the 20 to 25 percent level," Tamplin said. "Because, Lord have mercy, think where we’d be if be if we didn’t have those reserves (previously)."

Sales tax revenue did get a boost and nearly returned to 2008 levels. In addition, Administrative Assistant John Middleton said the county reworked its health insurance coverage last year to slow down the rising costs, which totaled about $4.4 million in fiscal year 2010.

Tamplin suggested that the county divert $2 million of its capital improvements to the fund balance to increase the ratio to around 12 percent. Capital improvements could then be delayed until the economy recovered.

Assuming the economy picks up in the latter half of 2011 and in 2012, the county should be able to rebuild reserves.

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