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Wednesday, February 9th, 2011

Revenue may drop by $1M

$800,000 Mercer County typically receives from state will likely disappear

By Shelley Grieshop
Revenue is estimated to be $1 million less this year for Mercer County, mostly due to a huge loss in state funds.
But the financial outlook isn't all "gloom and doom," county commissioner Bob Nuding told elected and appointed officials during a meeting at the county courthouse Tuesday.
"We're here to tell you this county is in much better shape than most counties around here," he said.
Nuding said the $800,000 the county typically receives from the state each fiscal year is likely to disappear. The state budget is expected to be completed by May, and local governments should know the impact soon after, he said.
Overall, the county projects revenue of $8.2 million in 2011, down from $9.2 million in 2010. The estimated 11 percent loss comes from the decrease in government funding, interest income, sales tax and fees.
The county brought a carry-over balance of nearly $1.6 million into 2011, but next year's total is expected to be much less - $407,683.
Nuding explained that sufficient carry-over cash is critical because during the first three months of the year, general fund expenses exceed revenue.
"We need that cash flow," he said, adding the county's credit rating also is based on the amount of carry-over funds each year.
The county has few options to generate additional revenue to cover the shortfall, Nuding said. Current sales tax is at the maximum - 1.5 percent - and fees for services already were reviewed for increases, he added.
The remaining option is a general operating levy, but officials don't believe it would be successfully passed by voters at this time.
"A levy is not a real good viable option for getting revenue today," Nuding said.
Commissioners are asking each department to be frugal, spend less, eliminate unnecessary traveling, hire no new employees and give no wage increases.
Employee salary and benefits make up 71 percent of the county's costs, Nuding explained.
"That's a big chunk, face it," he added.
Elected officials should ask their employees to take volunteer furloughs this year, he said. Last year, commissioners asked each employee to take a two-week, unpaid furlough. Some departments followed the suggestion, but others did not, commissioners said.
If local government funds are slashed, some departments may be asked to cut their hours of operation, Nuding said.
"Some counties have been doing this for several years," he said.
The state has suggested combining some elected officials' jobs as a way to chop expenses at the local level, Nuding said. An example would be fusing the auditor and treasurer's position, he explained.
If every department works together to remain frugal, the county will survive the ongoing economic crunch, Nuding said. He reminded the crowd that financial forecasts can be a guessing game because of the unknowns that lie ahead.
"It's sort of a crapshoot," he said.
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