The three financial officials of Schuylkill County made a preliminary presentation and overview of expenditures and revenues to the county commissioners in preparation of the 2010 county budget at a work session Thursday at the courthouse in Pottsville.
Summarized, they said, "We are being financially squeezed expenses are increasing and our revenues are decreasing. We are operating in a challenging environment." The preliminary budget will be unveiled at next week's public meeting. To balance the budget they must find a way to overcome a projected $3.5 million deficit.
Mark Scarbinsky, county fiscal administrator, began the presentation.
"In light of the recent economic crisis it's been difficult to put a handle on the county's future financial direction," Scarbinsky reported. "We had anticipated presenting a balanced budget but the process began to unfold as one issue after another prevented us from reaching this goal at this time, as currently the projected budget deficit is at $3.5 million. The 101-day state budget impasse left us very little latitude in developing responsive counter measures to offset the proposed funding reductions. Expenses projected have been decreased but operational costs continue to rise."
He continued, "Currently we project a 2010 budget of a minimum of 2.4 percent increase over this year's budget. We are fully cognizant of the commissioners direction that raising taxes is not the option, but we are preparing several options for the board the consider."
The options Scarbinsky referred to were; institute and maintain a hiring freeze, freeze on all travel and scrutinize all critical travel requests, consideration to eliminate and consolidate certain positions, reach out to the unions to discuss long-term labor commitments, and develop a partnership to assist with stabilizing and lowering labor costs.
"We have some tough choices to be made," he concluded.
Paul Strata, county budget analyst, commented that despite cuts made wherever possible by the departments and various agencies, the projection still shows an increase in overall expenditures.
"Currently all major purchases, travel and conference expenses must be reviewed and approved by administration," Strata said. "Our health care expenses dropped to a 9.7 percent for 2010 from an increase of almost 15 percent for the current year."
He added, "The energy upgrade instituted this year already has shown a savings of $25,000 because of the improved efficient lighting which was retrofitted in the courthouse, prison and Rest Haven Nursing Home; and new boilers installed in the three buildings. Currently we are scrutinizing all spending while trying to reduce expenditures where necessary."
Paul Buber, fiscal officer, said, "The 2010 preliminary budgetary revenues are projected to be about 7.3 percent less than what is needed to balance the expenditures for the general fund. The revenue shortfall is caused by the impact of the recently passed state budget, which lists reduction for our human service agencies which are mandated by the state, and means the county will have to pick up the costs difference."
He continued, "County revenues have been falling short of their benchmarks such as decrease in investment earnings, decrease in revenue from sale of recyclable products and decrease in departmental earnings, such as less buying and selling activity means less transfer tax paid and less construction means less permit fees."
He added, "General fund revenues are not increasing proportionately with general fund expenditures. Real estate tax collection makes up 67 percent of the total general fund budget and the last real estate tax increase occurred with the 2004 budget."
All three commissioners thanked the financial officers for the report and all insisted a budget will be adopted without a tax increase.
What was not discussed was a $7.1 million surplus fund, which has been built up by past administrations, but under a state ruling, it is a restricted fund which can't be used all at once. It may be used to cover an anticipated $1.3 million deficit which looms in this year's budget.