Cumberland County projects funding deficit in 2015

Oct. 02--CARLISLE -- Cumberland County general fund expenses may outpace revenues by about $1 million in 2015 if the commissioners do not cut spending or raise taxes.

That's according to an analysis the county finance department presented to the commissioners Wednesday. Budget projections show that the county has made substantial progress toward correcting an imbalance between revenue and expenses, but long-term budget deficits still loom.

The county temporarily reversed the downward trend in 2013 and 2014 by freezing step increases for employees, raising taxes, and introducing a gainsharing program that allows the county to avoid filling certain vacant positions, the analysis said.

In addition, the county's performance-based pay system is expected to be implemented and begin to affect the budget by 2016, Chief Clerk Larry Thomas said.

Still, the $1 million 2015 deficit would leave the commissioners with about a $21.6 million fund balance, only about more than the minimum deficit the county recommends. Without a change, the annual budget deficit would balloon to almost $5 million by 2018, and the fund balance would dip below $10 million.

That's still an improvement over projections from April, which showed the county running out of money by 2018.

Commissioner Jim Hertzler focused on the positives, such as the fact that even a projected $2.2 million increase in expenses for 2014 only returned the county to about 2012 spending levels.

"I think that kind of demonstrates the effort that we have formed here to control costs, reduce spending as we can," he said. "The (projections) don't necessarily take into account any additional actions that we may take to continue to control costs."

One initiative that seems to be working is a push to reduce overtime. The county is projected to have about $45,000 less in overtime costs in 2014 on top of an approximately $24,000 decrease in 2013.

There are also some unknowns in the budget, such as the state subsidy for 911 services, the financial effect of recently implemented child protection laws on Cumberland County Children and Youth Services, and the possible need to eventually replace the county's voting machines.

Commission Gary Eichelberger cited the unknowns, as well as the projected budget deficits, as reasons to stay focused on reducing costs.

"Every general fund budget, every department, has these unknowns out there, which just underscores the importance of the need for us to be vigilant with the things we do control ... and not miss any opportunity in those areas to make those changes," he said.

Thomas said there are still some big cost-saving opportunities that remain to be implemented, such as reducing expenses in the criminal justice system, cost-containment for Capital Area Transit and other transit services, and an expanded gainsharing program.

"We are in a target-rich environment," he said. "I don't think we've come remotely close to the potential savings that we could realize."

Real estate tax revenues are projected to have increased in 2014 by about $1.9 million thanks to a 3 percent tax increase and 1.1 percent natural growth. However, other revenue is projected to have decreased by about $1 million, and operating expenses have a projected increase of about $1.3 million due to increases in utility and insurance costs and payments to other agencies or governments.

Projected expenses in 2015 include a $1.8 million increase in the county's subsidy for 911 services. That increase stems from approximately $600,000 in rising costs and about $1.2 million in eliminated one-time funding sources the county used in 2014, Finance Director Dana Best said.

Absent any changes by the commissioners, employee salaries in 2015 are expected to rise by about 2 percent, benefits by about 7.5 percent, and operating expenses by 1.2 percent.

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