Joco 913

Proposed Johnson County budget strives for balance in face of state cuts

Johnson County is feeling the tug of state funding cuts, but it’s trying not to show it. County Manager Hannes Zacharias’ proposed 2017 budget struggles for balance.

Despite state cuts in funding, the $942.4 million proposed spending plan, revealed Thursday, does not raise the property tax rate, keeping it at a total of 26.595 mills, the lowest in Kansas.

County officials have tried to fill some of the budget gaps where the state has made cuts. For example, Zacharias said, the county would maintain existing services by providing additional funds to offset state cuts in areas such as mental health and senior care. But Zacharias said the county would continue to deal with the ever-changing state cuts “on the fly.” A 4 percent cut in Medicaid announced last month, for example, will mean more cuts to the county’s health and human services agencies.

“While the county’s finances continue to be prudently managed, state cuts are, and will continue to, deeply impact the county’s most vulnerable populations,” Zacharias said in a statement.

Zacharias said that the county was able to propose a balanced 2017 budget by virtue of strong revenues and assessed valuations.

“We can go ahead and harvest those dollars and put those to good use to plug some budget gaps,” Zacharias said.

He said sales tax revenues have seen moderate growth, but not as much as the last few years.

County Commission Chairman Ed Eilert and Zacharias were both vocal in their disappointment over increasing state cuts and what they mean to the county’s budget.

“On an annual basis, you’re talking about $45 million in one year — or over five mills is what we’re losing because of state reductions in dollars that were promised us that have now been taken out of the equation,” Zacharias said.

The budget reflects the state’s plan to gradually eliminate the mortgage registration collection fee. The county expects the fee to bring in $6.5 million in 2017 and $3.2 million in 2018 before it’s phased out of existence.

The budget’s capital improvement plan calls for $13.1 million for new voting machines, which Election Commission Ronnie Metsker requested, saying the county’s current machines are some of the oldest in the nation. It also includes $56.9 million for wastewater projects, including 2017 expenses for the planned expansion of the Tomahawk Wastewater Treatment Facility, and $14 million for the County Assistance Road System.

This budget proposes a maximum of 3,883.99 full-time equivalent county employees, including 13.4 new jobs that receive county tax support and 16.5, primarily in wastewater and parks and recreation, that are funded by fees.

The county will increase its employee health care contribution by 18 percent, but employees will have to increase their contributions by 36 percent. Zacharias said that means employees would be paying about $75 more per month.

Zacharias warned that a new state property tax lid on municipal governments that will be in effect for the 2018 fiscal year budget, could affect the county’s AAA bond rating.

Right now, the county has a 24 percent general fund reserve. Zacharias said that the rating agencies prefer them to have 30 percent in reserves, but “we can’t afford that, to be honest about it, so we’re hoping that a stabilized reserve of about 24 percent will accommodate and continue our AAA bond rating.”

Eilert expressed concern about this possibility, especially in view of the borrowing necessary for projects such as the Tomahawk Wastewater Treatment Facility expansion.

The property tax lid will limit the power of the county commissioners to raise property taxes when they feel it’s necessary, starting with the 2018 budget. If property values are re-appraised at a higher percentage than the consumer price index, the lid can also prevent the county not just from raising the mill levy but also from keeping a constant mill levy for future budgets.

Some items in the county budget, such as emergency services, are excluded from the lid, but right now it’s not clear which departments and positions are specifically excluded.

There are more work sessions scheduled for the county commission throughout June, and they will have their maximum spending ready for publication June 23. Following that, the county will hold a public hearing Aug. 1 and plans to approve the budget by Aug. 25.