The number-crunching will get complex as the Bartholomew County Council begins the 2017 budget process this week.
With the looming question of whether a new Local Option Income Tax will be necessary, preliminary estimates of anticipated revenue are expected to be released as the first budget hearing gets underway at 8:30 a.m. Tuesday, Bartholomew County auditor Barb Hackman said.
But as it does every year, the council will still have to make critical decisions months before they know exactly how much money the county will receive.
While more dependable revenue figures arrive in October, exact income numbers for 2017 from the Indiana Department of Local Government Finance may not be released until February.
But in accordance with state statutes, the council has scheduled first-reading approval of next year’s budget on Sept. 8, with final approval and adoption set for Oct. 13.
Much of the panic that took place during last year’s budget talks was the result of a state requirement requiring the county to separate $5.9 million in county-adjusted gross income tax funds from the general budget, Hackman said.
As a result, most council members mistakenly thought total revenue was much lower than it actually was, Hackman said.
“They weren’t looking at apples-to-apples when it came to revenue, and that’s what caused some of the confusion,” the auditor said.
Since that requirement has been repealed, such confusion should not happen again, she said.
However, a legitimate concern remains regarding the amount that will be available to pay county expenses for the first half of 2017, Hackman said.
Normally, the county attempts to hold back $5 million in reserve to pay expenses until the county receives its first installment of revenue from the state in June, the auditor said.
But current estimates indicate there may be less than $2 million available for the first half of 2017, Hackman said.
In terms of new expenditures, eyebrows were raised when Bartholomew County Sheriff Matt Myers announced he will seek about $1.1 million in additional capital and personnel expenses when he appears before the council at 8:35 a.m. Thursday.While certainly the largest, Myers’ request won’t be the only significant funding increase being considered. A substantial amount will also be needed to renovate the 64-year-old Bartholomew County Highway Garage, as well as to retain skilled information technology experts and emergency dispatchers.
There’s also a possibility the county might be forced to establish a Public Defender office to avoid lawsuits similar to what is taking place in at least three other Indiana counties, councilman Mark Gorbett said.
Recent positive developments regarding the county’s financial health, however, have made council members who stand firm against new taxes cautiously optimistic, council president Bill Lentz said.
But those like Hackman, who said new revenue will still have to be generated, say there have been negative developments as well.
Optimism was expressed by council members last March when the state announced Bartholomew County would received $6.7 million in local income taxes held in reserve by the state. In addition, Indiana lawmakers permanently lowered the amount of income taxes held in escrow for local governments from 50 percent to 15 percent.
But after last spring’s allocation was distributed and earmarked funds set aside for road repair, only $621,372 was left out of the one-time allocation for discretionary spending, Hackman said.
It was recently announced that Bartholomew County’s maximum levy growth quotient, which limits the amount local governments can annually increase property tax levies, grew from 2.6 to 3.8 percent.
While that sounds promising for raising new revenue, the county has averaged 673 property tax appeals annually over the past four years, which has resulted in millions of dollars of lost revenue, Bartholomew County Assessor Lew Wilson said.
The county will also lose a little more than $1.7 million in revenue after state lawmakers approved tax relief for small businesses with $20,000 or less in their assessed valuation, Hackman said.
On the positive side, the county now has $3.37 million in its Rainy Day reserve fund, compared to about $2 million at this time last year.
But that increase will be offset when the Bartholomew County Commissioners significantly lower their contribution of economic development income funds into the general fund to ensure sufficient road funding, Hackman said.
Last year, the self-insured county spent millions to pay high health care claims of its employees. As of the beginning of this month, however, the health care trust fund had a $850,000 balance, county officials said.However, the current plan to fully restore the fund calls for both the county and its employees to increase their contributions by 5 percent next year, commissioner Carl Lienhoop said.
Although the council is expected to pay that amount, officials will wait until later this year to determine whether employees will have to do the same, Hackman said.
Since 366 county employees were given a one-time $750 bonus this year, instead than a raise, to handle significantly higher insurance costs, both Gorbett and councilman Jorge Morales said raises should be addressed near the beginning of the budget process rather than at the conclusion.
“Employees need to know, in order to reduce rumors and ill feelings,” Morales said.
While Hackman said she appreciates their motives, their suggestion may not be practical under the circumstances, she said.
In regard to this week’s hearings, efforts have been made on both the local and state levels to provide financial data to the council in a more timely manner than in years past.However, faster may not always mean accurate.
Initial state estimates that indicate property tax caps could result in up to a $1.5 million loss for all local taxing units is “very, very unlikely,” Hackman told the council last week.
Bartholomew County Treasurer Pia O’Connor agreed, adding her research indicates the impact will likely be closer to what county officials originally anticipated for 2017.
During last year’s sometimes tumultuous budget hearings, the council was repeatedly accused of failing to engage in long-term financial planning.
This year, council member Laura DeDomenic has headed an effort to meet in advance with various county department heads to address that concern.
Departmental schedule – Bartholomew County 2017 Budget Review
8:30 a.m. – Opening discussion and revenue estimates
10:30 a.m. – Clerk
1 p.m. – Auditor
1:25 p.m. – Treasurer
1:45 p.m. – Recorder
2:05 p.m. – Surveyor
2:40 p.m. – Coroner
3:10 p.m. – Prosecutor
4:10 p.m. – Assessor
8:35 a.m. – Technical Code Enforcement
9:05 a.m. – Emergency Management
9::35 a.m. – Cooperative Extension
10:25 a.m. – Park Board
11 a.m. – Veterans Service
11:15 a.m. – Weights & Measures
11:30 a.m. – Council
1 p.m. – Maintenance
1:40 p.m. – Court Services
3:10 p.m. – Circuit Court
3:40 p.m. – Superior Court 1
4:10 p.m. – Superior Court 2
8:35 a.m. – Sheriff
10:10 a.m. – E911 Operations
10:45 a.m. – Information Technology
1 p.m. – Commissioners
2:15 p.m. – Highway Department
3:10 p.m. – Health Department
3:45 p.m. – Visitor Information & Promotion
4:15 p.m. – Solid Waste Management
8:30 a.m. to 4:45 p.m. – Review and deliberations
All meetings take place in the fourth floor council chambers at the Bartholomew County Government Office Building, 440 Third St., Columbus.