Revenue down, spending up for next year
Five months before the 2011 general operating budget goes into effect, Kent County Administrator and Controller Daryl Delabbio said the spending plan would have a deficit of $9.2 million if the current level of service is maintained next year.
Although the projected shortfall is $300,000 less than a few months ago, Delabbio said more reductions have to be made. Those reductions are likely to total about $7.2 million because county commissioners are willing to dig into the reserve account for $2 million to commit to the deficit.
A good portion of the cuts are likely to be in the county's personnel cost, which accounts for 56 percent of the budget's projected $172.6 million in expenditures for 2011.
That $93 million expense is likely to fall somewhat in the near future. Three of the county's 13 labor unions — including the largest, which represents 860 employees — have agreed to give up half of their salary increases for next year. The wage hikes, which ranged from 2 percent to 2.5 percent, were gained through bargaining and approved by the county commission.
The budget forecast reviewed by the Finance Committee last week didn't contain the reduced salaries because UAW Local 2600, the largest bargaining unit, agreed to the salary reduction after the forecast was compiled.
"We haven't done that yet," said Delabbio of updating the personnel cost. "Now we can look at this and get a little more information on the salaries."
A further reduction to the salary expenditure may be coming. Delabbio said five of the bargaining units have accepted the county's new voluntary retirement incentive program. Those five unions cover about 1,280 of the county's 1,700 employees.
"It's too early to determine how many will retire," said Delabbio. Any cut to personnel costs for next year, though, isn't likely to avoid layoffs.
The forecast also showed that total revenue to the general operating budget is projected at $163.3 million, down by about $2.3 million from this year.
Although revenue from property taxes next year has been projected to be about $1 million higher than this year at $86.7 million, the figure includes roughly $3 million that is likely to be transferred to the capital improvements budget.
So income to the fund from property taxes is expected to be down by 1.2 percent, or $1.06 million. Taxable value for all properties in the county has been projected to fall by $277 million, or 1.3 percent, next year. Revenue from property taxes accounts for 53 percent of the budget's total income.
The projection also showed that income from investments will be off by 53 percent and down by about $1 million from this year, to $887,500 in 2011. Transferred revenue to the budget is expected to be off by 23 percent, or $7.4 million, largely because state revenue sharing will fall from nearly $10.3 million in 2010 to about $4.5 million next year.
Delabbio said he wasn't sure where revenue sharing stood for 2011, the year the county is to resume getting its full share, and likely wouldn't know until Lansing lawmakers approve the state's general operating budget. The county should have a better idea of what that figure will be by Oct. 1, which marks the start of the state's 2011 fiscal year. The county's fiscal year begins Jan. 1.
The county's budget review committee began going over the 2011 general operating budget last week. Delabbio said he planned to have a budget update for the Finance Committee at its next meeting.
Total revenue to Kent County's 2011 general operating budget is projected to be 1.4 percent less than this year's expected total, while 2011 expenditures are pegged to be 4 percent higher than this year's — if services next year are maintained at the current level.
Source: Kent County, August 2010