County auditor proposes tight ’08 budget

COLUMBIA — A slowdown in the economy combined with the added costs of conducting elections will force Boone County to tighten up its fiscal year 2008 budget.

Boone County Auditor June Pitchford said during a budget proposal meeting Thursday that the county’s sales tax revenue — the county’s most important source of revenue — has all but flatlined. Pitchford forecast county sales tax revenue to grow at a meager 0.5 percent rate in 2008.

That decrease in revenue, in addition to losses from a reduction in building permit fees and real estate recording fees, has left the county in a budget crunch.

“We recognize that we’re in a significant economic decline,” Pitchford said. “There are a lot of moving parts and they’re all moving in the wrong direction. This is probably the tightest economic situation that I’ve seen in my 17 years here.”

Pitchford said the county will retain its level of services to citizens despite the budget shortfall.

In addition to a slowdown in revenue, the auditor’s budget included more than $900,000 to pay for elections in 2008. That figure, which has nearly doubled from 2004, comes from higher standards required by new federal elections legislation.

“The election tab is far beyond anything I ever expected,” Pitchford said.

To help pay for these elections, Pitchford’s budget includes an option for the county commissioners to levy an extra two cents on the county’s property tax next September. Paying for the increased costs of elections with property taxes would keep the county from having to dip into its fund balance, which would sink to the federal accounting standard of 15 percent of the general revenue fund if used to pay for election costs.

Last year, the fund balance came in at 16 percent, and there has been a push to require the fund balance to be at or above 20 percent.

In her presentation, Pitchford was quick to mention that levying extra property tax is a short-term solution and that if the long-term economic situation doesn’t improve, other measures will have to be taken to pay for the county’s costs.

Including the option to levy the two-cent tax in the proposed budget would allow the Boone County Commission to keep its options open when it comes time to pay for the elections. Unlike the city’s budget, the county’s budget cannot be changed or reallocated once it is approved, so leaving the choice to levy extra property taxes in the budget will ensure the county will be able to sustain its cash flow.

“We don’t want to be in the position of interrupting services,” Pitchford said. “Including (the extra property tax option) in the budget gives the commission a tool to pay for the cost (of elections).”

Boone County Northern District Commissioner Skip Elkin took issue with the plan to levy extra property tax to pay for the election.

“To me, a tax increase is something that is a last resort,” Elkin said. “We can pay for the election and still keep the fund balance within federal governmental accounting standards.”

Elkin also expressed concern that one department’s needs would be automatically heard — and funded — over other departments who were being asked to cut costs.

Boone County Southern District Commissioner Karen Miller said she was hesitant to levy the tax but that keeping an adequate fund balance is essential.

“I don’t want to go to a 15-percent fund balance,” Miller said. “That’s playing with fire ... I think it’s responsible to keep (the tax option) as a tool.”

County Commissioner Ken Pearson agreed with Miller that keeping the tax option in the budget was a good choice.

“In bad economic times you need a larger fund balance,” Pearson said. “We have to be responsible in how we plan for the future.”

The next step will be for the County Commission to make changes to the budget prior to its final approval.