As officials begin to prepare for the Calloway County Fiscal Budget of 2020-21, it is noted how important it is for citizens to understand the process local officials take in order to create it.
Preparation for the 2020-2021 budget has seen even more challenges to the normal process with the influence of COVID-19. The legislature, which normally prepares a two-year budget, concluded the 2020 session with only a partial budget recommendation to the governor.
Many of the big-ticket items that needed to be addressed like tax reform, pension, cost of living and transportation were all placed on hold, therefore, making it extremely difficult for the county treasurer to create a basic budget for the Fiscal Court to review.
In addition, mandates such as were put on the County PVA to push off setting tax assessment rates by two months have even more complicated the budgeting process for this year. Yet, it is noted that the final reading and passage must be done by June so it can be approved and adopted by the Department of Local Government on July 1.
The county budget for 2019-20 fiscal year was $15,698,471.04 with a revenue of $7,548,763.01 and a prior year carry over of $8,149,708.03.
Costs for the county have been increasing over the last few years. These costs include: payroll, due to cost of living, utilities, employee retirement, employee healthcare, insurance, building maintenance and petroleum products, to name a few.
An example of how increased expenses have out-paced revenues is the jail maintenance. The Jail Construction Fund, which was funded by the jail tax and passed when the jail was constructed in 1996, was removed over a decade ago.
The purpose of the tax was to help pay off construction of the jail and to set aside funds for future projects and funding of the jail. Given the spending of 2019 from the jail, it is estimated the funds will be zeroed out by this fiscal year, June 2020. The general budget would likely have to cover these additional financial needs, around $500,000 to $700,000 per fiscal year, if a new revenue source is not found.
This coupled with the reduction of funding coming from the Transportation Cabinet due to the reduction in funding generated from the state gas tax will more than double the reduction of funding for the Road Department locally. The county will have to look at grants and emergency funding to offset these reductions, but there are no guarantees which makes the budgeting even more difficult.
The Department of Revenue recently issued letters to all the counties that no longer maintain debt on judicial or court facilities. These 37 counties, including Calloway, will see a 50% cut in the funding they normally receive from the state for rental and facility upkeep on the Judicial Center. This was a direct mandate from language added to HB 356 (Judicial Branch Budget Bill which was passed and signed into law by the governor in January 2020).
Editor’s Note: Opinions expressed do not necessarily reflect the editorial opinion of the Murray Ledger & Times.