Thursday, October 02, 2014
Brown Proposes No-Tax-Hike Budget, But Is It Balanced?
Northampton County Executive John Brown thinks he can make it through next year without a tax hike. He released his Budget Message for next year during a news conference this morning at the Centralized Human Services Building. The Budget itself will be released tomorrow and posted on the Northampton County web page.
Next year, Brown is projecting $279.5 million in total revenue. That's a $9.4 million drop from this year, and is due primarily to cuts in Human Services grant funding, as well as a stagnant real estate market.
He's proposing a $334.4 million budget, a $16.2 million cut from this year. He asked department heads to come ip with 10% in cuts, and was able to realize 6% ($3.5 million). In his budget message, he states that "[o]ur employees aree the most valuable assetsd we have." But he stated yesterday that there will be no wage increases other than those already contained in previously approved union contracts. He has also reduced the County's contribution to health care for its 2,200-person workforce, although he was unable immediately to quantify the savings achieved.
His proposed budget includes only "minimal" capital improvements, although the County will continue on the work started with a 2013 bond issue for bridge reconstruction and rehabilitation, replacement of generators at the Courthouse and Gracedale, and a boiler house for Gracedale.
The County contribution to Gracedale next year is projected at $7.7 million.
The most interesting feature of his budget message is a proposed $20 million line of credit. He downplayed that in his news conference, calling it a "back up plan". His budget message states it will be used only if revenue is insuffucuent "to support operating expenditure requirements." But it also states, "a Line of Credit is proposed to balance the budget."
Northampton County's Home Rule Chater expressly prohibits any form of borrowing "to finance annual operating programs or services", with the exception of emergency borrowing. The Home Rule Charter also expressly requires a balanced budget. It states, "The total of proposed expenditures shall not exceed the total of anticipated funds available."
Brown was asked repeatedly whether this line of credit violates the Home Rule Charter requirement of a balanced budget, and he stated he would have to research that question.
It appears that it might also be illegal to seek a line of credit for operating expenses except for an emergency appropriation that would rerquire the assent of County Council.