When the mentat spoke of this week's budget hearing, he said there was a $42.6 million fund balance at the end of last year. This includes a stabilization, or rainy day, fund. That should be between $8-16 million, enough to pay for one to two months of expenses without a dime of revenue coming in. According to the independent auditor, there should be four to five months of expenses.
By the end of this year, the mentat predicts that the fund balance will drop to about $33 million. Of that sum, $19 million will be committed to balance the 2014 proposed budget. This will leave just $14 million in the stabilization fund, under the two-month threshold. If the County spends less than the committed $19 million to balance the budget, its rainy day fund will go up If the County spends more, the rainy day fund will go down. .
So at the end of next year, the money just may b not be there to balance the budget. That will mean a tax hike.
"Our revenues are not the problem, other than the fact that the real estate tax base is stagnant," noted Hamman. "We have a pretty good handle on what the revenues are going to be." Eight years ago, when the 2006 Budget was presented, the tax base generated $3.1 million in additional revenue. Now, it's under a half million dollars. "The growth of the tax base has shrunk significantly."
"What hasn't shrunk is the salaries, fringe benefits and operating costs of any government entity."
"As the County continues to spend, while the revenue growth shrinks, the only alternative without raising taxes is to deplete the fund balance."
Ken Kraft asked if the County should be raising taxes now.
"If you don't have one this year, it's on the horizon," answered the mentat.
Then though AFCME was gone, Kraft made a speech full of inaccuracies. "It's been on the horizon for seven years. What I see on the budget is we keep not filling positions, we keep making people do more, we take from people here, with like their $4,000 co-pays for health care, and we never really do the hard work, the heavy lifting, to make this a balanced budget, is what you're saying. ... We are shrinking the people we have by not filling these positions all the time, like in 911, and we're balancing the budget in not replacing people."
Stoffa: "Ken, we haven't shrunk the workforce, the workforce has grown.
Hamman: "The workforce has grown in the last eight years by about 60 FT positions."
There are 1825 full time and 258.5 part time positions.
Kraft is wrong when he asserts the County is not filling positions. The 911 vacancies he mentions - there's six of them - are being filled. And Hamman pointed out that the bulletin board is overflowing with posted positions.
When he released his budget last week, John Stoffa stated that he has tried twice to convince Council on the need for a tax hike. "There's no political will," he points out.
Kraft, union agent Justus James and Controller Steve Barron are instead blaming Stoffa for Obamacare, which they all advocated.
The impact of Obamacare on local government was pointed out in the New York Times in August:
State and local governments across the country tend to offer more expensive health plans than private businesses do, and workers often accept smaller wage increases to retain their benefits. Because of this, state and local government employees are expected to be disproportionately represented among those whose plans will be subject to the tax.Barron falsely claimed that "the County withheld this important information," at this week's Budget hearing, though this has been public knowledge for some time. In fact, in negotiating union contracts, the County reserved the right to make unilateral changes to health plans precisely because of Obamacare.
Now it's no secret that the public jobs tend to pay less but offer better benefits. If these Obamacare changes can't be reversed, the only solution is a wage hike to be fair. And that would also mean a tax hike.