Rutherford County is facing a $10 million budget shortfall in the next fiscal year, not counting what Rutherford County Schools and a handful of other departments need for next year.
County Finance Director Lisa Nolen estimated a 20-cent increase to the property tax will be needed to balance the budget, unless the county can find money somewhere.
“There is not anyway you can cut $10 million out of the county general fund without compromising county services,” County Mayor Ernest Burgess said.
Burgess said the county will do its best to protect services like public safety, but cuts are going to be made.
A bulk of the shortfall comes in the form of salaries for county employees and rumors have been swirling about a possible 10 percent cut to all salaried workers.
Burgess said it’s not true. And even if all salaries were reduced by10 percent, it would only save the county around $5 million.
“I don’t think there is any practical way to cut salaries 10 percent,” he said.
But workers shouldn’t expect a pay raise this year, because of the budget situation.
“Passed that, there will be a close evaluation of all open positions and a close look at some filled positions,” Burgess said.
The county’s options for filling the budget hole are slim this year because last year, the county faced an $18 million shortfall and balanced the budget by raising the property tax, cutting employee pay raises and reducing in-service, training and travel expenses, along with office supply costs.
But still the budget was $6 million short. Now the county has no rainy day fund to dip into.
“We dug a hole and at some point it’s going to fall in on us,” Commissioner Rick Hall said about the county’s budget situation.
Declining tax revenues have also contributed to the county’s budget deficit. The development tax, building permits and interest earnings from investments have all seen declines during the current economic downturn and are down substantially compared to the last five years.
Nolen said fee collections alone are $1 million off what was projected for this fiscal year, especially fees tied to construction.
“All the fees tied to that are all down,” she said.
And don’t expect any help from federal stimulus funds.
Tennessee is set to receive around $2.1 billion over the next two years with most of it funding TennCare. Tennessee will receive about $172 million to cover the cost of general government operating expenses.
“While these are programs we technically administer in various ways, they do not directly affect the discretionary state budget except insofar as they improve the general economy,” Bredesen said at his budget presentation.
The stimulus package’s fiscal stabilization funds target state government and education mostly, with little to no money for local governments.
“As far as operating cost and reoccurring cost, there’s basically no benefit (to the county),” Burgess said.
Stimulus money will help the state fully fund education over the next two years, but will not plug the budget gap, he added.
Michelle Willard can be contacted at 615-869-0816 or firstname.lastname@example.org.