COVINGTON - Department heads are being asked to cut their budgets in the wake of news the county will have an estimated shortfall of between $5 million and $5.5 million for the current fiscal year ending June 30.
Today, department heads will receive a copy of their current year's remaining budget, along with encumbrances already approved by the Board of Commissioners, and will be asked to find ways to trim "any fluff and unnecessary items," Commission Chairman Kathy Morgan said.
County commissioners will hold a daylong work session beginning at 8:30 a.m. Feb. 14 at the Newton County Historic Courthouse, where they will go through the budget line item by line item and look at department heads' recommendations.
"I'm of the opinion that the department heads know where the best areas to cut in their departments are, without compromising services to the community," Morgan said.
Special consideration will be given to public safety departments.
"We don't want to put our constituents in harm's way by cutting public safety and fire services or something along that line. By the same token, if there is any room for those areas to postpone spending or save dollars, we do encourage those departments to do that," she said.
Morgan said layoffs or furloughs of county employees are being considered, but can likely be avoided during this round of cuts.
"Nothing is off the table, but that's not something we anticipate at this time," she said. "We have positions that have been frozen and not filled. As we look into next year's budget, I would hope the Board of Commissioners would choose to do a furlough program rather than laying off employees. We have very skilled and trained employees that we have invested tax dollars in to get trained for their job descriptions, and I would not want to lose that investment."
The county approved a $55.1 million budget for fiscal year 2009; now eight months into the cycle, the shortfall represents 20 percent of the remaining $25 million, Morgan said.
The county auditor, Wayne Tamplin of Treadwell, Tamplin and Company, notified commissioners of the shortfall at their annual new year retreat, held last weekend at the FFA-FCCLA Center.
Tamplin said the $5 million projection is a worst case scenario based on numbers that are currently available. The major contributing factor is sales tax revenues, Tamplin said.
"Sales tax sort of seems like it's in a free-fall; nobody really knows if this is the bottom or not," he said.
Typically, the county collects between $800,000 and $900,000 per month in sales tax revenues. Collections for November, the last month for which numbers are available, were about $640,000, Tamplin said.
Collections for the month of December are expected to be higher due to the holidays, but those numbers have not been reported by the state yet, he said.
As one of the fastest growing counties in the nation during the last few years, the county has benefited from an increase in fees and taxes related to growth, such as development inspection fees and recording taxes levied against mortgage notes. Collections on those types of revenues are "way off" now that growth is slowing, Tamplin added.
Also, in the past the county has made money by housing prisoners from other counties in the Newton County Detention Center.
"Now, the jail is full of Newton County prisoners," and as a result, the detention center has gone from a revenue producer to a revenue user, Tamplin said.
Another potential factor is property tax collections. The county generally has a 97 percent property tax collection rate. While the county can enforce payment of property taxes, "Whether they remain timely is anybody's guess," Tamplin said.
For every percentage point of taxes not collected during the year, the county budget takes about a $235,000 hit, he said.
Tamplin said personnel costs typically take up about 65 to 70 percent of any budget.
According to Morgan, county staff has been looking at how to trim their budgets for some time and have already made reductions.
"Even though this sounds quite critical, it's something county employees have been looking at for two months now, and it didn't come as a big surprise. ... As unfortunate as it is, I'm really pleased with how the commissioners and the county employees are working together to help us balance this budget," she said.
Crystal Tatum can be reached at firstname.lastname@example.org.