Busted Again
We have reached a fork in the road in Jefferson County. On one side is a rock wall and the other a plunging drop. Before us is the path to debt or default. Not really the position that anyone wants to be in but this is, unfortunately, where we find ourselves. Simply put, we just don’t have the funds to pay our debt in 2016 without robbing every fund of every available cent. Forget saving for an emergency-this is an emergency. Sure, we have all been here before in our personal finances. The heat pump goes out the same day that the credit card statement comes in loaded with Christmas purchases-one kid needs new shoes and the other needs a check for a $75 school annual and the dog has fleas. You know those days and, sometimes, months. That is the position that our County finances are in. However, pulling the County out of the red is not as easy as pulling personal finances out of the red. I say that slightly tongue in cheek because debt has a way of wrapping around you like quicksand and pulling you under. And make no mistake, we are knee deep, reaching for branches and grasping air.
If you were under the impression that we had a “healthy” fund balance don’t feel alone. That was my impression and the impression of many others. Apparently, there is a distinct difference in fund balance and available fund balance. No kidding. Our debt service fund, which pays the debts that we incur from things like bonds for the building program or land purchases, will be short in 2016 when current projections are that we will owe around $8 million dollars. This year, 2015, our debt is around $7.2 million. With the influx of property tax money that will go into the debt service account and the additional outflow we are simply put-broke. The previous County Commission approved paying a portion of their cash contribution for the renovation of JCHS from the debt service fund (more than $1 million dollars). But, the money simply isn’t there without leaving the fund at the bare minimum. It has been suggested that the County Commission include their total cash contribution of $4,000,000 for the renovation at JCHS in the bond issuance for Building 8 which would make the bond issuance around $7 million. Unless, as has been suggested, the County Commission also includes the amount that the school board was to contribute to the JCHS building plan ($1,010,000) which would push the bond to almost $8 million. Because the school system is broke, too.
Naturally, when we borrow money our payments increase and they will certainly go up. How are we going to pay our debt? Property tax increase or wheel tax increase are the most likely avenues. It has been suggested that doubling the wheel tax would be a more fair increase because many residents are not property owners. Roughly speaking, it would take around a 10 cent tax increase to raise the same amount of funds that doubling the wheel tax would accomplish ( using last year’s figures). On a $150,000 house that comes to about $150 more per year. For a family that drives three cars, the wheel tax proposal would be about $75 increase per year.
The rub is that either of those options have us just scraping by and don’t account for any other increases that are needed. And we all know that things happen-stuff comes up and stuff costs money. We don’t have extra money, thus we are still broke. A long time ago, it was projected that it would take around a 46 cent tax increase to pay for the school building program and I believe that we are on our way there. Oh, we may get there with a combination of funding sources but the end $$ will still be the same.
Broke. Busted. In the red. Upside Down. Don’t have a pot to…well, you get it. Anyway that you phrase it, we need money. I feel rather sorry for the County Commission and especially the Commissioners that inherited the problem. What a way to indoctrinate a new Director of Finance. Welcome to Jefferson County government. Save us.
I think the pertinent question is why didn’t we see this coming? Were we blinded by the glare of light shining off the portables or perhaps the batteries just ran out on the calculator? You know that is a problem that has plagued us in the past. More than likely, we knew what we knew but we didn’t want to know. From now on, the question that the County Commission should be asking is what is our available fund balance? Wheel tax increase or property tax increase? Maybe we should just invest in a gaggle of geese and hope that one lays a golden egg…or two. Or better yet, Jefferson County could open a night school and offer an associates degree in the fundamentals of government. That way we could be in line to cash in on some of the “promise” money that will be floating around. Hey, it seems to be working for other entities running in the red. A nearly legitimate way to fix an almost legitimate problem. Sounds about right.
