When Miller Edwards with the accounting firm Mauldin & Jenkins began his presentation last week concerning the county’s financial condition, none of the commissioners were expecting a rosy picture, but we’re not sure they expected to hear the bleak scenario Edwards described.
After all, the commissioners had already pulled several rabbits out of their hats. The early retirements was a big one that reduced the county’s workforce. The garbage fee increase they had been talking about for almost a year was finally a done deal, so was a 3 mill tax increase. The new SPLOST will start to kick in this year after passage in 2016, but those funds won’t help on the operational side of the ledger. The 3 mill property tax increase will steady the ship, but there is still a breach, one too severe to stanch with just that added revenue.
Still, with all of that, the county had to dip into is reserves $12 million in fiscal 2017, after withdrawing from savings $8 million in 2016. That leaves just $7.7 million in the piggy bank to deal with unexpected occurrences, like another hurricane or other natural disaster or unexpected cost overruns. Sure, the county will be reimbursed for some of the expense for Irma debris removal, but it could take years for that to happen.
The sad thing about this news is that it wasn’t a natural disaster that threw the books out of whack, rather, assumptions that didn’t pan out. Edwards told the commissioners as he reviewed the 2017 audit that there needed to be a better “pulse” taken on what revenue projections are going to be moving forward. Edwards said, “We were a little aggressive on our budgeting with revenue projects. We were a little short in what we had as goals for property taxes and sales tax and franchise taxes, as well as fines and forfeitures.”
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What he basically meant is the county budgeted to bring in more income from those sources mentioned but they brought in less — $5.5 million less — than projected.
OK, that’s understandable to a degree. Even using historical trends, sales taxes are hard to predict as are fines and forfeitures. Sales taxes have become even more unpredictable as Internet sales have dramatically increased. That said, the hungry budget-draining dragon here is “Other Post Employment Benefits” (OPEB). These are benefits that don’t include pensions, such as health care, life insurance, disability, legal and other services to retirees.
The county is going to have to ante up $4 million toward OPEB next year and $8 million in 2020 and more funds in subsequent years. This is not a Macon-Bibb County issue alone, but one that faces every municipality. So what to do? Good question. Part of the answer is planning — short and long term. Commissioners will be faced with making some decisions real soon about how generous the county can afford to be toward its employees, particularly in the health care area. Cost have risen, $2 million last year alone, in response to medical claims, but the county took the hit. Commissioners made some coverage adjustments but have not touched what employees pay into the cost of their health insurance.
The commission will take a deep dive into the numbers at its retreat at the end of the month. They are already discussing an OLOST which could cut property taxes and raise $26 million annually, and there is already a transportation special purpose local option sales tax, or T-SPLOST, referendum that will be on the May 22 ballot in an 11 county area.
Regardless of the needs, will voters go for more taxes? That’s the question. We think it will be a tough sell.