Raise taxes, cut services or use the BP settlement to address a revenue shortfall? Those are the options Bay County commissioners are considering as they enter a crucial phase of the Fiscal Year 2014 budget process.
For the past several years, the county has experienced declining property tax revenues. Although the latest projection indicates a 1% increase for the current year, county officials say it won't offset expenses and the result will be a shortfall of about $4 million.
County staff has presented commissioners with a budget of $81.6 million for 2014, an increase of 0.92%. The increase is blamed on higher costs for health insurance due to the Affordable Care Act and state-mandated retirement plan funding.
Commissioners haven't decided how to deal with the shortfall, but its $8.7 million BP settlement could help bridge the gap. In prior years, the county tapped its cash reserves instead of raising the millage rate.
"BP money helped us replace a lot of those reserves and we probably will have to use some of them to defray or eliminate any tax increase this year," Commissioner George Gainer said. "We've kept the taxes real low and we're going to continue to try to do that."
Gainer said another option could be a reduction in services, although the county has cut nearly 100 jobs in recent years and finding new areas to cut could be difficult. "We simply have to run this county on the amount of money that our tax base provides and before we raise the taxes we've got to cut the services," Gainer said.
County employees haven't received a pay raise in six years. At the June 18 commission meeting, County Manager Ed Smith asked whether the board would consider a pay increase – or at least a one time payment – for the county's workforce.
"All the county employees have made the sacrifices that we've asked them to and we've gotten by with less people and less money than we've ever had to get by with before," Gainer said. "If there's some room or some area that we can reward some of those folks, then I expect the county would do that... if not, then I doubt very seriously anybody will get a raise this year either."
In September, county commissioners will conduct two public hearings to adopt the millage rate and final 2014 budget.