Interest Rate Forecast Darkens Gloomy Budget Picture

Loss Of Revenuewould Eliminate Put-backs Of Cut Programs

April 07, 1991|By Darren M. Allen | Darren M. Allen,Staff writer

Commissioner Vice President Elmer C. Lippy Jr. walked into a crampedfirst-floor meeting room to join the other commissioners and a cadreof budget number-crunchers.

"I have some good news," Management and Budget Director Steven D. Powell told Lippy as he prepared to sit down for yet another budget work session.

"Good news?" Lippy responded. "Coming from you, I don't believe it."

Don't believe it. Although Carroll County during the last fivemonths has been struggling through its worst budgetary crisis in recent memory, last week's news from Powell was still startling -- and it was anything but good.

Higher national unemployment figures -- up 0.3 percentage points to 6.8 percent in March -- more than likely will spur the Federal Reserve Board to lower interest rates. And that,Powell said, would lower the county's revenues for the budget year beginning July 1 by at least $500,000.

Should that happen, Powell and the commissioners said last week, any hopes of adding back more than $1 million in cut programs would be --ed. The county is expected to earn $4 million in interest on investments this year; that is expected to drop below $3.5 million for the next budget year.

"Right now, we don't have anything to play around with," Powell said. "My office is preparing a proposed budget without any add-backs."

His office has recommended to the commissioners a fiscal 1992 spending plan that calls for $115.2 million in expenditures, down nearly 2 percent from the current year's $117.5 million.

Earlier in the week, the commissioners spent hours going over the recommended budget, trying to find ways to maintain some money in a surplus fund. With the unemployment news, and the potential for falling interest earnings, the $500,000 the commissioners set aside could shrink to $300,000 or less.

Such a surplus would be the lowest maintained by the county in at least a decade, and, Powell said, one that would leave little room for any error.

Before the deteriorating economy and the round of state and federal budget cuts, Carroll County was expecting a $3 million surplus for the current year.

That surplus has been eroded by a $5 million budget shortfall this year. To make up for the cash shortage, the county imposed a hiring and salary freeze; curtailed travel and overtime; and instituted across-the-board cost-cutting programs.

But that hasn't been enough to stop the shortfalls.

"Part of me justwanted to ignore this latest news and go forward," Powell told the commissioners during the Wednesday budget session. "But I would much rather we make reductions now so that if things turn around, we'd be in a better posture to put things back in."

The commissioners agreed, and, for now at least, it looks like 1992's proposed budget will not include funding for a 7,500-home pilot curbside recycling program;restoration of a month of transportation services for the Departmentof Aging; or funding for the hiring of seven new employees for the Sheriff's Department.

"Our first priority has got to be that unfunded balance," said Commissioner Julia W. Gouge as she and the rest of the commissioners decided to keep a surplus in the proposed budget.

Commissioner President Donald I. Dell last week was looking at waysto cut the budget -- already called bare-bones by county officials -- even further. He wanted to cut some planning studies, travel costs and arts funding.

The lower interest income and higher unemployment figures "are just what we need to wipe us out," Dell said.

At the same time the operating budget is lower than this year's. The capital budget -- which pays for roads, bridges, schools, buildings, and other bricks-and-mortar projects -- would amount to nearly $35.6 million, down 30 percent from this year's $50.5 million.

County agencies had requested $93.5 million for 1992.

The commissioners are hoping to maintain the county's property tax rate of $2.35 per $100 of assessed valuation as they prepare to adopt the 1992 budget.

The commissioners are expected to release an official proposed budget by themiddle of the month. A budget and a tax rate must be approved by May30.

PROPOSED COUNTY BUDGET

Operating budget... ... ... Fiscal 90-91... ... ... ... .Fiscal 91-92

General Gov't... ... ... ...$ 13,808,658... ... ... ... .. 13,697,060

Public Safety & Correction... .9,140,829... ... ... ... ... 9,476,250

Public Works... ... ... ... . 10,644,605... ... ... ... .. 10,368,690

Health & Human Services... ... 3,520,310... ... ... ... ... 3,523,575

Education-other...... ... ... 2,336,190... ... ... ... ... 2,320,030

Education-debtsvc... ... ... .1,538,600... ... ... ... ... 1,931,615

Public Schools... ... ... .. .55,542,950... ... ... ... .. 58,050,000

Culture & Recreation... ... .. 5,029,139... ... ... ... ... 4,972,990

Cons. Nat. Resources... ... ... .962,210... ... ... ... ... . 917,860

Eco. Dev./Assistance... ... ... .520,815... ... ... ... ... . 520,030

Internal transfers... ... ... .1,108,585... ... ... ... ... 1,178,340

Debt service... ... ... ... .. 4,654,340... ... ... ... ...5,363,665

Reserve accounts... ... ... .. 1,471,841... ... ... ...... 1,000,000

Grants... ... ... ... ... ... ... 25,000... ... ...... ... .. 20,000

Total operating... ... ... .$110,304,072... ...... ... ...113,340,105

Approp. to capital... ... ... .7,183,300... ... ... ... ... 1,909,600

Total appropriation... ... .$117,487,372... ... ... ... .$115,249,705

Capital budget... ... ... ..Fiscal90-91... ... ... ... .Fiscal 91-92

General Gov't... ... ... ... $12,874,840... ... ... ... .. $9,416,780

Culture & Recreation... ... .. 1,299,500... ... ... ... ... . 958,500

Public Works... ... ... ... . 17,710,800... ... ... ... .. 11,768,985

Education... ... ... ... ... . 9,863,050... ... ... ... .. 12,027,650

Cons. & Open Space... ... ... .8,764,000... ... ... ... ... 1,399,000

Total capital... ... ... ... $50,512,190... ... ... ... . $35,570,915

SOURCE: Office of Management and Budget/CARROLL COUNTY SUN GRAPHIC

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