FAYETTEVILLE — Washington County’s Finance and Budget Committee failed Tuesday to decide — even informally — on steps to tackle the $5 million budget gap between spending and revenue or address pending financial struggles.
“I think what we’ve learned is that we have our work cut out for us and that nobody has a miracle solution,” said Justice of the Peace Eva Madison, a Democrat representing northeastern Fayetteville.
Madison is chairwoman of the committee revived by County Judge Joseph Wood this year and includes all justices of the peace. The committee discussed Tuesday and last month what options are available to cover a $5 million spending gap, mitigate pending tax revenue loss and still provide services.
Washington County has a roughly $66 million budget but is short roughly $5 million in covering its costs this year, records show. That gap was about $4 million the year before.
At the same time, the county’s reserve shrank by more than $1 million in the first five months of the year, records show.
Unrestricted reserve, including jail and insurance reserve, are at roughly $6.5 mill- ion, according to comptroller records. Unappropriated reserve alone was about $5 million as of May 17.
Several justices of the peace supported raising the property millage rate last year back to 4.4 mills.
The rate was reduced to 3.9 mills about six years ago. Justice of the Peace Butch Pond, a Republican representing eastern Washington County, estimated the cut cost the county about $10 million since the tax was cut.
Restoring that half mill raises about $1.5 million per year in revenue, according to documents.
But, on Tuesday, most justices of the peace said they aren’t yet willing to decide, even by show of hands, whether to support any millage increase. One justice of the peace said he’s decided and strongly opposes raising the rate.
Justice of the Peace Joel Maxwell, a Republican who represents western Washington County, said the committee should think about prioritizing its needs and wants and set goals before talking about raising the millage rate.
“We need to have in our head a maximum amount of money that we are willing to spend,” Maxwell said. “Are we comfortable spending $5 million over (budget) again? I think we ought to be looking at multiple ways to bring revenue up and bring expenditures down.”
Raising taxes alone will not solve the problem, agreed Justice of the Peace Tom Lundstrum, a Republican representing northwestern Washington County.
“It’s important to take a really broad look at this,” Lundstrum said. “It’s not something that can be changed overnight.”
Options for adjusting the budget include changing the split for a 1-cent county sales tax shared with the Road Department, cutting a road millage that helps pay for city streets, increasing health insurance premiums for employees and adjusting down a salary cap for elected officials.
Maxwell proposed selling vacant county property and reviewing services provided to the cities.
A document presented at the meeting also lists an idea for a 3 percent cut to operation costs for all departments. That alone would save about $758,000 per year.
Justices of the peace left giving employee raises next year up in the air, too. The document also lists an option not to fill vacant positions but consider dropping positions or making them part time. No savings were listed with the two options.
If the county makes cuts, adjusts its taxes and increases the millage rate, it would nearly raise enough revenue to cover the $5 million gap, according to figures presented Tuesday. But, that won’t solve long-term problems, justices of the peace said.
The county stands to lose money after the next U.S. Census as cities grow in population and get more and more of the 1-cent sales tax, Lundstrum said. A statewide, half-cent road sales tax also is expected to sunset in 2023, Madison said. The combined loss to Washington County would be about $3 million per year, justices of the peace said.
The county must become more efficient, mayors and the Quorum Court must work together and legislators must be made aware the county cannot continue to pay for state services, justices of the peace said. State functions paid for by the county are costing Washington County roughly $4 million to $5 million per year, Madison said.
Madison said she didn’t think there was any one solution to the county’s financial woes. Everything should be considered, she said.
“Everybody needs to realize that to get it done, it’s going to take help from every part of the county really,” Madison said.
Budget session starts early
The Quorum Court approves the completed budget in November or December. Justices of the peace are considering options early to look closely at financial woes the county has now and long term, they said Tuesday. Options include cuts, position freezes, health insurance premium increases, tax split adjustments and a property tax increase.
Source: Staff report
Scarlet Sims can be reached by email at ssims@nwadg.com or on Twitter @NWAScarlets.