County Changing Budget Process
Commissioners agreed to send another $43,363 from the revenue-sharing reserve fund to the 2007 general fund to reduce that account's deficit. The move is allowed under state law because the 2006 inflation rate in
Instead of 3.3 percent, the figure the county used to put the budget together, the official rate turned out to be 3.7 percent. So the county can transfer the additional amount to keep pace with inflation, meaning $11.2 million has gone from the reserve into the general fund.
But the shift also lowers the reserve in the revenue-sharing account, and the county isn't expected to receive any revenue-sharing dollars from the state until 2011, because the state changed the due date for property-tax payments when it ended revenue sharing to counties. That change let counties collect property taxes more quickly and set up the reserve fund, which is supposed to replace revenue sharing until the payments are restored.
"It reduces the amount of balance in the fund. The fund will be liquidated some time in 2011," said County Fiscal Services Director Robert White of the revenue-sharing reserve.
Commissioners also appropriated $6,500 from the lodging excise tax reserve to cover the wages of two employees who collect the tax in the Treasury Department. Although the appropriation isn't large, it further strains a fund balance that will fall to a projected $1.7 million at the end of this year. In 2002, the reserve peaked at $7.2 million.
Expenses from the hotel-motel tax will run about $6.2 million this year, while tax receipts for 2007 are anticipated to be $5 million. At this draw-down pace, the reserve could be gone in 2009 unless the tax generates more revenue or cuts are made to expenditures.
Kent County Administrator and Controller
In recent years, the process started in March or April and commissioners voted on the budget in September. But this year, the process will begin in July and board members will adopt the budget in December. The county's fiscal year is the calendar year, but that may change in a few years, too.
Under an earlier state law, counties could only begin a fiscal year on either Jan. 1 or Oct. 1. But with the change the state made to property-tax collections, counties can now have July 1 as a starting date for a fiscal year, and Delabbio has his staff looking into whether a change may help the county's stagnant fiscal situation.
"We haven't flushed that out yet to determine what the impact will be," he said. "Bob White is crunching some numbers and we're going to be looking at the pros and cons of doing that."
White said he would have those numbers in about six months. He also said some counties may begin issuing short term "tax anticipation" notices as payments to creditors, because delaying property tax payments until summer has meant counties with a calendar-year budget now have to operate from seven to eight months without that pri
To make a switch from Jan. 1 to July 1, Delabbio said the county would have to adopt an 18-month budget or ratify two budgets: one for 12 months and another for 6 months.
Another change has the county reviewing service levels that are attached to policies that fuel the budget. Commission Chairman Roger Morgan will appoint a budget subcommittee to identify the relationship between the services the county provides and the funding levels for those services. The subcommittee is expected to file its report in June, a month before department heads make their preliminary funding requests.
"We've always looked at budget targets in terms of dollars," said Delabbio, "but we also have to look at service levels."