Monday, September 13, 2010
 
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County gearing up for fiscal 2011 and future

Part 2: The biggest unknown

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[September 13, 2010]  Nearly everyone has felt the hard pinch following the national and global economic turmoil. Just as many families took stock of their financial conditions, tightened belts, realigned finances, and some even had to look for alternative revenue sources, government entities have gone through the same.

While planning for this year's county budget, the finance committee anticipated the dips that have now been realized in lower revenues from property, income, sales and other taxes.

Property and replacement taxes fund 20 percent of the county's core operations, the "general fund," and 30 percent of all combined departments and services. Across the board, revenues have been lower but not too far outside what the committee projected during last year's planning.

What is Logan County's current financial standing?

Month by month this year, the finance committee has seen Logan County departments stay under budget, and the county board has repeatedly commended our officials for their restraint.

While reviewing Logan County's year-to-date expenses up to August, board chairman Terry Carlton said: "Overall we're right on track at 74.9 percent, which is pretty much where we want to be." He added, "Our department heads are managing their expenses very well; most are under 60 percent."

Looking at the department figures, "budgeted year-to-date was $5.6 million, but actual was at $4.2 million. That's good," he concluded.

In Jan Schumacher's review of revenues, she said that property tax was down some, replacement tax was only 66 percent but better than last year, sales tax could look a little better, income tax was down 50 percent, but the public safety tax was holding. She had good news that some state reimbursements had come in on the state's attorney's and assessor's salaries.

She also observed an increase in building permits, which not only came as a pleasant surprise, but a hopeful indicator of future growth. The permits that had been projected at $5,000 for the full year are up to $19,000 year-to-date with three months remaining.

This month the committee is ready to begin the delicate task of jiggling projected revenues over anticipated expenses and see where next year's figures come out.

The biggest "fly in the ointment" planning for the coming year is guessing how the state will live up to its obligations.

At the start of the summer, delayed state dollars subsidizing the sheriff's, probation, public defender and the state's attorney's offices inked red on the county's general fund. As payments gradually caught up, that put August figures back in the black.

Word filtered down last month that the state would be making permanent cuts in subsidies to some of the above county offices.

The committee is taking stock of this potential as it could hold serious consequences. Sharing this concern, finance chairman Chuck Ruben reminded members that once a budget has been adopted, it cannot be decreased. The intent of the Illinois statue is to protect offices from having funds taken away by the administrators or the county board in mid-fiscal year due to bias for or against individual officeholders.

In the event that funding would either be cut or not come in during the county's fiscal year, the county would still be liable for those costs.

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The largest budgeted use of county funds to all departments is the health department at 22 percent. The department's 2010 budgeted expenses were nearly $3 million. Its levy from the county was $870,370. The Logan County Department of Public Health gets most of its support through state and federal sources.

That department has been subject to substantial amounts of delayed state payments this past year. In addition, many of its programs were cut this spring, but the department continued support of important programs where funding may be restored.

Administrator Mark Hilliard said they are seeing some of the state funds come in, but it waffles from month to month, putting them behind $300,000 to $500,000.

An important observation is that the recent catch-up payments from the state have been made out of its new fiscal year that began on July 1. Those who follow state spending speculate that it could be as early as December when the state would again begin running significantly behind in its payments.

Earlier this year the finance committee dealt with an example of how the state has been shifting its financial burden to local governments. While setting four-year salaries for officials in the next election, it was noted that the state had cut the sheriff's subsidy twice in amounts totaling nearly $10,000. The county picked up that tab as well as scheduling to bring the sheriff's salary up to the minimum of what other counties of comparable size and economics are paying.

As the committee prepares to set the next budget, they are anticipating the potential of either state cuts or the state's inability to pay when it runs short on funds.

Carlton's concern is that it could throw hundreds of thousands of dollars unbudgeted costs on the county. He called on officials to review local fines or fees for services that could help offset the losses.

The soon-to-be future?

Carlton told task force members that the United Counties Council of Illinois is now encouraging counties to unifying with its communities in overlapping services and departments wherever it can. Counties and municipalities that begin this process now would be ahead of the game.

While quite a complex prospect, especially where unions are involved, the task force endorsed Carlton exploring the possibilities of unifying services with communities in Logan County, beginning with the city of Lincoln.

The chairman and board member Schumacher plan to attend a UCCI conference on strategic planning for the county, which Carlton believes will be enlightening and crucially important to the county's future.

As the committee continues its work on the county's next fiscal year budget this month, it may need to polish its crystal ball and look deep to conjure an idea of what will come in the next year.

[By JAN YOUNGQUIST]

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