It is highly likely that Newton County will have to layoff some of its employees in the next budget cycle in order to balance a projected $5.3 million deficit.
The unwelcome realization for the Newton County Board of Commissioners that the county would have to let go or furlough some of its 600 plus employees is the result of declining property tax revenues, sales tax revenues and fees from permits to build new homes. Because of declining state revenues, the county is also picking up more expenses formerly paid for by the state.
The BOC was briefed on the state of the county’s finances at a board planning retreat at the FFA-FCCLA Center by CPA Wayne Tamplin on Saturday.
The rapidly deteriorating state of the county’s finances surprised many, considering that as recently as the end of fiscal year 2007 the county was able to close the year with a 25 percent budget fund balance.
"I’ve been at this for 36 years and I’ve never seen anything like this in such a short time," Tamplin said.
Two weeks ago the BOC, in a 3-2 vote, approved a spending freeze which excluded public safety, legal services, constitutional officers, emergency services, special projects and day-to-day operations, making it largely ineffectual as those areas compromise the large majority of the county’s budget.
However it now appears that no department will be getting a spending freeze pass.
Newton County Chairman Kathy Morgan told the board that she had directed all county department heads to look for ways to cut their budgets from 15 to 20 percent. A meeting with all department heads to go over proposed budget cuts is scheduled for Friday.
Morgan said she would also be requesting a meeting with all county constitutional officers, which includes the sheriff, tax commissioner, probate judge and superior court clerk, to search through their budgets for areas to cut.
"A large percentage of where we’re down is the fees that we anticipated," said Morgan, adding that because of a full jail, Newton County was left with paying surrounding counties to take in its overflow inmates. Until recently the county earned revenue by taking in other counties’ overflow inmates.
As personnel costs comprise 65 percent to 70 percent of the county’s $53.3 million budget, it is almost certain the county won’t be able to make up the $5.3 million deficit expected by the first quarter of FY 2010 without laying off or furloughing some employees.
"[Of] the department heads I’ve spoken to, layoffs are not off the table," Morgan said, adding that some departments may choose to furlough their employees instead, due to the specialized training that they have. "We don’t have minimum-skilled employees. We don’t have a lot of fluff."
County Administrative Officer John Middleton said 50 percent of the county’s employees are employed by the Newton County Sheriff’s Office. He added that Sheriff Ezell Brown is looking for cost savings within his office, which was over-budget last year.
Middleton suggested the possibility of putting some employees on 32-hour work weeks, so that they might still maintain their benefits.
"It’s going to be a sobering reality for a lot of people," he said. "Pens and pencil [expense cuts] are only going to save you so much money."
Added District 1 Commissioner Mort Ewing, "There’s no other way to look at it. It’s got to be personnel."
The budget projections given to the board include $1.8 million in reimbursement from the state through the Homeowner Tax Relief Grant. If the Georgia Legislature decides to eliminate the statewide grant program this year, as Gov. Sonny Perdue has requested, Morgan said the county would have to re-bill the 24,000 county residents who have qualified for the exemption, which will have added administrative costs.
The property tax break saves homeowners an average of $200 to $300 a year.
Special Purpose Local Option Sales Tax collections are also down as a result of the poor economy. In December only $640,000 was collected from the SPLOST. Tamplin told the board that monthly collections needed to be at $800,000 if the county was going to fulfill all of its SPLOST project obligations before the timeframe for the tax collections expired.
"If it doesn’t get up to $800,000 monthly, you’re not going to be doing $5 million in road [improvements]," Tamplin said.
The board discussed what next steps to take regarding the stalled hotel/civic center project, which has a $5 million SPLOST allocation. As that is a bonded project, it takes priority over non-bonded projects such as the renovation of the Cousins Gym and the historical jail museum project.
Because the bank that was going to provide a loan for the construction of the hotel has backed out, the status of the hotel portion of the project is currently up in the air.
"Without the hotel, we’re left with figuring out how to build the civic center and conference center," said County Attorney Tommy Craig, adding "I think it’s time to go back to the drawing board. We need to keep faith with the people that voted for the civic center."