County pay cuts seen as option to balance budget

Friday, May 14, 2010

Getting paid less per hour is better than unpaid furloughs, according to the chairman of Marshall County's Budget Committee who's endorsing a suggestion stated publicly by the county's chief building inspector.

Don Nelson, who's leading the building and codes office with planning and zoning responsibilities, made the suggestion several weeks ago during a discussion with county commissioners who last year sought to cut spending by shortening the county work-week.

It didn't work for several reasons. Nelson explained one of them, as did other county employees. Work piles up during unpaid furloughs and it's hard to catch up. The idea of lower wage rates was revived last week during a Budget Committee meeting and it's continued as department funding requests are being reviewed weekly.

"He would rather see us cut pay instead of hours because it would just back up their work," Commissioner Mickey King said the day after a recent Budget Committee meeting. "I agree with it. I understand where he's coming from."

Contractors depend on Nelson's work to keep their construction projects on schedule. Home construction is a chief leading indicator for economic trends. If it's up, other purchasing follows for refrigerators and other durable goods. If it's sagging, the economy slows down. It's been a fact of economic life described by the Tennessee Homebuilders Association and has been a leading economic indicator tracked by economists at Middle Tennessee State University for nearly 15 years.

"I know it's going to put a burden on the employees," King said of lowering county wage rates. "But, it's not the employer's fault. It's the economic times."

King knows he has just one vote on such an idea and that it won't cure all the county's financial problems that are rooted in the county's bad economy with the highest unemployment rate for three months straight. As a result, residents aren't spending money, so sales tax revenues are down.

Commissioners seem to have reached a consensus that the next county budget can't be completed with any reliance on new revenue from a proposed sales tax rate hike, and there's a resolve to not increase the property tax rate of $3.09 per $100 of assessed value, King said.

Meanwhile, property tax revenue is down because of foreclosures and taxpayers who've decided to postpone the inevitable.

"We're looking at a $1.4 million shortfall, according to some numbers we put together," King said. "It started out at $1.5 million, but we found some real simple stuff and it may be down to $1.3 million."

However, that was accomplished by "moving some funds from one account to another," he said. "It's not from reserves."

That's in a total budget of nearly $50 million, including a $34 million school budget, and it's mostly state and federal money.

County Budget Director Freda Terry has been compiling a list from each department on where spending can be reduced, Commissioner Mary Ann Neill said.

"In a household budget, it would be disposable income," Neill said.

As a member of the Budget Committee, she's also concerned about reduced revenue as reflected by an apparent reduction in how much money is raised by each penny on the property tax rate. Last summer, it was $48,800. It's lower now. It had been in the $50,000 range.

Last week, the Budget Committee selected a strategy for the budget hearings they've started. Neill called it "a lot of organizational things."

Thursday evening, the series of budget meetings continued after an Employee Benefits Committee meeting was held "to see what the insurance situation will be for next year," Neill said. Last year it was controversial when the health insurance deductible was to have gone from $500 to $2,500.

Tuesday night, the Budget Committee met for about three hours and considered the county mayor's budget, the election commission budget and other departments.

Two hours into the spending review, committeemen realized they'd not cut much and actually increased planned spending, largely because there was no choice.

Four levels of government have elections or primaries in August, and in November a new governor will be elected and voters will select state and federal lawmakers. As a result, the election commission will be spending more in fiscal year 2010-11 than in 2009-10.

Preliminary figures indicate spending on elections and that office will be $201,000, but $35,000 of that is a grant for election machines and $40,000 is the increased cost for holding the elections.

"We want to vote on this in July," Neill said, "although it's typically in August or later" after a continuing resolution is adopted; a legislative legality used regularly by Congress to have more time for deliberations on the annual budget.

Contrary to cynical observations made on a condition that the cynic isn't identified, Neill said, "The budget committee will have a budget ready for the next commission" elected on Aug. 5. Neill isn't running for re-election. New commissioners take office Sept. 1.

"We want to leave the commission in a better place than what we found it," Neill said.