Budget challenges

MAYVILLE — County Executive Greg Edwards already has ideas on how to address the 2012 budget deficit. For as difficult a budget as next year’s county budget has been described, the 2012 budget will have just as many challenges. As part of his budget presentation Wednesday, Edwards outlined several trends which contributed to the 2011 budget deficit and will continue to grow in 2012. Specifically, those trends are the county’s Medicaid contributions, payment to the state retirement system, community college chargebacks and programs of the Health Department and Department of Social Services. In 2011, the county’s Medicaid costs will increase by $3.8 million, retirement will increase by $2.5 million, chargebacks will increase by $1.5 million and a total of five programs in the Health Department and Department of Social Services will increase by $1.3 million. Respectively, in 2012, each of those costs will grow by $2.7 million, $2 million, $225,000 and $1.5 million. Also in 2012, employee pay and benefits are scheduled to increase by $2 million — taking the total mandated and contractual increases to $8,498,000. Further exacerbating the 2012 budget situation is a projected revenue loss of $10,125,000. As proposed by Edwards, the 2011 budget will draw from three county reserves — $2,853,600 from the General Fund, $5,800,000 from the Post-Employment Benefit Reserve and $1,525,000 from the Capital Projects Reserve. As a result, that money will then not be available in 2012. SALES TAX SOLUTION Between the nearly $8.5 million in increases in 2012 and the more than $10 million loss in revenues, Chautauqua County is facing another $18 million deficit in 2012. To begin addressing that gap, Edwards would like to take the county’s sales tax rate to 8.25 percent on March 1, 2011. Additionally, he would like to eliminate the hold harmless provision which sees the county paying sales tax revenues to the towns, villages and cities out of its General Fund. Increasing the sales tax rate will take it to the rate it was at in 2005. That year, the county saw $35.9 million in revenue from the sales tax. In 2006, the county saw $38.7 million in revenue from the sales tax. The property tax levy those years were $53,870,279 and $53,869,639, respectively. The county puts its sales tax revenue at $30.5 million for 2010 and $26.2 million for 2011. The property tax levy for 2010 is $54,598,392 with the 2011 levy proposed as $59,596,962. “I’m proposing in the 2012 budget we return our sales tax rate to 8.25 percent, the same amount it was in 2005,” Edwards said Wednesday. “That will increase revenues by $9,750,000. It’s my proposal that we eliminate the hold harmless provision that’s been imposed upon us and that’s going to return to our General Fund $2,100,000 that we will no longer be sending off to towns, villages and cities.” The combined amounts of the sales tax increase and the hold harmless elimination would take the projected 2012 budget deficit from $18,623,000 to $6,773,000. “As I had previously presented, this is a project we’ve been working on since these numbers became clear early in this year,” Edwards said of the 2011 budget. “Evidence of that work should be apparent in the fact that I’m not proposing a 38 percent increase in property taxes, but instead, through efficiencies and cuts that have been made through the departments. “You’ll hear these on a department-by-department basis, but there are some that I’m sure will stun you,” Edwards continued, mentioning the Finance Department. “We found efficiencies throughout our organization yet again. I’m intimately aware of how far we’ve had to cut our budget and what this means to our ability to deliver programs, the programs that we’re not going to be able to deliver next year and the demands that are going to be placed on us as an organization in continuing to satisfy our obligations for the people of Chautauqua County. I believe this is prudent, I believe it is appropriate based on the facts that were presented to us. I believe this should be a call to arms not only to all of us in this room, but to everyone throughout Chautauqua County.”