What's Next: Newton County will hold a budget work session Monday at 6:30 p.m. at the Historic Courthouse. The district attorney's office, superior court, 911 department and recreation department will present their proposed budgets to commissioners.
While the federal government wrangles over how to cut its budget and reduce its deficit, Newton County officials are staring at the other side of the coin, trying to find a way to increase its dwindling emergency reserves while tax revenues continue to drop.
Chairman Kathy Morgan said the county's top two priorities this budget cycle are to ensure that the county has enough money to cover its financial obligations and to continue to provide the services that residents need.
The destination seems simple enough, but the path might have more than a few twists considering total revenue is expected to be $2.6 million less than last year, while county department heads say they need at least $4.6 million more to provide the level of service they deem necessary. Put those two numbers together ($43.7 million in revenue and $50.94 million in requests) and the result is a gap of more than $7 million.
In addition, the county's emergency reserve, or fund balance, is dangerously low and the county needs to put more money in the bank to maintain a high credit rating.
Morgan cautioned that many of the department's requested increases will not be realistic given the revenue constraints. The budget options that commissioners will ultimately consider will be created once all departments have made their presentations.
Many departments have simply requested equal funding from last year, but Morgan said that each department is supposed to build its budget from the ground up starting from $0. However, for departments where as much as 90 percent of their expenses are related to employees, there's really not a need for any calculations. Supplies are as low as they can be, and further cuts would necessitate pay or employee reductions.
One of the revenue problems is that fees have declined in addition to property tax revenue, but many departments are not seeing much less work. One example is real estate transactions. The county is on pace to have 1,400 foreclosures this year and that procedure requires all kinds of paperwork. Unfortunately, foreclosures don't bring in the same amount of revenue as building permits, deed transactions and impact fees.
Morgan said she and the financial staff could produce two budgets for commissioners as in past years. A bare bones budget and a budget that shows commissioners where she and others think the county needs to be.
Some sort of tax increase or a deep cut in services seems inevitable, and that has upset many residents who felt they were promised that property taxes would not be raised if SPLOST was passed.
However, Morgan says that SPLOST has still been a saving grace for the county.
"We would be having a completely different discussion if SPLOST had not passed. We would have to include entire other pieces into the budget, debt service and vehicles," Morgan said. "SPLOST is a big part of the equation. We don't want to put the entire burden on the property taxpayer."
Commissioners will ultimately decide whether to raise taxes or cut services, but Morgan cautioned that cutting services does not equate to being fiscally responsible.
"Our creditors have asked us what the county's doing to stabilize itself," Morgan said. "They've asked ‘Have you stopped providing services?' If counties have cut back, that's not viewed highly in terms of credit worthiness.
"Being fiscally responsible means you are meeting residents needs and have the dollars to sustain them."