County approves budget, discusses depressing situation

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By Ted Pennekamp

 

During its budget hearing Tuesday morning, the Crawford County Board of Supervisors approved of a budget which will have a total tax levy of $8,964,950. Last year’s levy was $8,263,948. The tax rate for county purposes will be $7.48, which is up from the $7.11 of last year.

A tax rate of $7.48 means that the owner of a property valued at $100,000 would pay $748 in property taxes for county purposes. The equalized valuation in the county is $1,198,895,900, up from the $1,161,540,100 of 2019.

As part of the adopted budget for 2020, the county board voted 16-0 to approve of the borrowing of $500,000. Supervisor Henry “Buzz” Esser was absent. The Highway Department is reducing its budget by $500,000 to help balance the county’s overall budget for 2020. The borrowed money will go to the Highway Department to cover this expense. The borrowed $500,000 will be paid off within one year said Supervisor and Finance Chairman Duane Rogers, who gave a budget presentation before the board.

Rogers explained that after assembling the initial department budget requests for the 2020 budget, the budget was $1,066,000 higher than the levy limit imposed by the state. 

To balance the 2020 budget, Rogers said the general fund will be spent down by $300,000, the Human Services Department will give back $250,000 to the budget and the county will borrow $500,000 to be paid back within one year.

Rogers said the general fund will have been spent down by a total of $657,000 in the years 2019 and 2020. This has resulted in a drop in the general fund as a percent of the expenses ratio from 32.8 percent to 25.4 percent. He said 25.4 percent is at the bottom range of what the county is comfortable with and what the county’s accounting firm is comfortable with.

The general fund has dropped from $2,944,574 to $2,287,574. In addition, the budget has a wage increase of 2.5 percent for all employees beginning in January of 2020. The 2.5 percent wage adjustment increases the county’s operating expenses by $368,503.

Rogers and the other County Board supervisors agreed that the county can’t continue spending down the general fund and borrowing in order to balance the budget in the coming years.

Rogers said the county is in a bind because the state increased the county’s levy limit by only $98,603 because it is based on a formula involving net new construction in the county. Net new construction in the county was only .73 percent. All counties that don’t have much new net construction are facing similar budget problems.

Essentially, wage increases and other operating expenses continue to go up each year much more than the state imposed levy limit. Therefore, Rogers and other board members said the county may have to go to referendum to go beyond the levy limit in order to balance future budgets. They said a referendum would be a better option than continuing to borrow and continuing to spend down the general fund.

Another option discussed was a possible wheel tax of $20 per vehicle. Nobody really liked this option either. However, it was noted that there are about 16,000 vehicles in Crawford County that would be affected by a wheel tax. If the county charged a wheel tax of $20 per vehicle, the county would receive about $320,000 annually. All revenue generated by a wheel tax must be used for transportation related purposes. Vehicles affected by a wheel tax would be automobiles and truck registrations at 8,000 pounds or less, except dual purpose farm vehicles.

Another unpalatable option would be to cut personnel and services. Each department budget would have to be cut by about 5 percent in order to make up for the approximately $1 million each year that the county is expected to be over the levy limit.

“Our backs are up against the wall,” said supervisor Greg Russell, in noting that he would rather go to a referendum as the first option rather than a wheel tax.

“This is the most depressing presentation that I’ve had to give,” said Rogers. “I don’t know what to do for next year.”

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