Bartholomew County government won’t be “in dire straits” next year — but only because coffers were in good fiscal shape before COVID-19 hit.
That’s how county Auditor Pia O’Connor describes a significant part of the current situation as the Bartholomew County Council prepares to begin budget talks for 2021.
The total amount currently being requested in all county funds for next year is $56 million. That is $2.8 million above what was budgeted for this year. General fund expenses of $30.3 million — $2.8 million higher than this year — are included in that figure.
“From where we are right now … we need to cut $1.6 million,” O’Connor told the Bartholomew County Council.
When looking at income and expenditures, there are a number of pluses and minuses to consider, county officials said. For example, the property tax growth quotient, a formula used to calculate the annual growth in tax levies, increased by 4.2%.
That will provide an additional $2.6 million next year, when compared to this year’s levies, according to a executive summary prepared by O’Connor and her staff.
But this increase in revenue will be largely offset by lower estimated income taxes, the summary states. Due largely to salary reductions and job losses, local income tax revenue is expected to drop by $2 million next year — 10.45% lower than the current year, O’Connor said.
Also, due to travel restrictions imposed earlier this year, there has also been a sizable reduction in gas tax revenue. It’s expected to reduce the amount earmarked for the county highway department by $562,953, the summary stated.
As current estimates now stand, local income tax revenue earmarked for county buildings, roads, public safety and emergency 911 service are all estimated to be 10% lower in 2021 when compared to this year, O’Connor said. Income from miscellaneous revenue sources is expected to be down by almost $600,000 next year, due to the negative impact COVID-19 had on investments, she said.
Since the amount of local income tax funds designated for the jail will not fully cover all operations, money will have to be taken from the General Fund to cover those expenses, O’Connor said.
But the good news is that the county has substantial reserve balances in many funds that, even with the drop in revenue, ensures ample revenue for all 2021 requests — if the county council wants to dip that far into their reserves in just one year.
Estimates indicate the General Fund will have an estimated cash balance of $13.6 million at the end of this year — and a balance of $12 million at the end of next year.
“This is in addition to our Rainy Day Fund that currently has a balance of ($4.5 million),” O’Connor told the council.
But many council members say they want to restrain spending as much as possible, just in case the economic downturn worsens, and reserve funds are needed for essential services. In addition, O’Connor advised the council to set aside enough money to make debt payments just in case of an unexpected revenue disruption next year.
In earlier meetings, the auditor has warned that if the economy does not improve in the short term, Bartholomew County government will likely be in substantially worse financial shape in 2022 than in 2021.
No one can be sure about what unknown expenses or revenue loss may arise next year due to COVID-19, the auditor said. She has set aside $3.5 million for those expenses, which O’Connor says she’s hopeful will be more than what will be required.
Finally, one of the most daunting challenge facing the council will be setting a budget for 2021 before they can get a firm grasp on next year’s revenue streams.
The financial information the county receives from the Indiana Department of Local Government Finance is likely to keep changing from now through at least October, O’Connor said. However, the council is required to adopt next years budget on Tuesday, Oct. 13.
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The major changes in general fund expenses for Bartholomew County government next year include the following increases.
- Unexpected COVID-19 – $3,489,533 increase (rough estimate)
- Jail Correctional Facility – $449,687 increase
- Anticipated increases in liability and other insurance
- Expansion of jail addiction treatment ASAP program – $72,458 increase
- Sheriff’s pension – increase of $89,158
- Body and Car cameras – increase of $127,000
There are also changes that will cost less in 2021 than they did this year that include:
- Sheriff Capital purchases – decreased by $78,780
- Courthouse repairs – decreased by $1 million
- County Recorder budget moved to Perpetuation Fund – reduction of $168,820
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Today through Aug. 21: Budget review with county offices, the Solid Waste Management District and the Convention, Recreation and Visitor Promotion Committee. Hours are noon to 6 p.m.
Sept. 8: Public hearing and first reading of the 2021 county budgets.
Oct. 13: Second reading and adoption of all 2021 budgets.
Although the public is not allowed to attend these sessions in person due to COVID-19, the sessions are livestreamed.
Contact the Bartholomew County Auditor’s office at 812-379-1510 for instructions and passwords needed to watch the budget sessions.
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