Source: The Corydon Democrat

Council makes right choice to subsidize budget
My Opinion

by Ross Schulz

February 04, 2014

The Harrison County Council gave a report last week about the financial standing of the taxpayer-supported county General Fund which began the year with a surplus of $1.19 million. A number of people had issues with the way it made it to that figure with the help of the county’s community fund at the Harrison County Community Foundation.

The community fund was put in place to grow to a level that when, or if, the time ever came that the riverboat revenue no longer flowed to the county, the council could use the fund to provide a safety net for a few years in order to continue the same level of service before having to make the difficult decision to cut services and/or raise taxes.

The fund has reached that point, growing to nearly $68 million as reported this week to the board of commissioners.

It has been used in the past for reasons unrelated to the above agreement for the Harrison County Hospital ($5 million) and the renovation of the old hospital into the Government Center complex ($9 million). The council used $2 million from the community fund at the end of 2013 to ensure that the county General Fund stays afloat, and it could be argued that it was not meant for that use either, since the riverboat is still fully alive and well.

While the county cut costs in some places, specifically the highway department, the overall budget continues to increase.

The only department that has a right to question the budget actions is the highway department, since it was significantly altered to save money because revenues failed to meet spending, while much of the rest of county government was — and is — subsidized with riverboat gaming funds because revenue failed to reach the spending level. Granted, the highway department is a separate fund altogether, but it still falls under the county government umbrella like everything else.

For 2014, the council has already approved $2.5 million to be used out of the fund for the same purpose.

The ’14 budget increased for a number of reasons, including the council agreeing to raise the debt reduction for county school corporations from $2.5 million to $3 million, which will, in turn, help lower property taxes; the budget also calls for a 1-percent raise for all qualifying employees at a cost of about $127,000; raises for those deemed underpaid by the Waggoner, Irwin, Scheele & Associates compensation plan at a cost of $100,000; a new employee at the sheriff’s department (evidence technician) for about $40,000; security at the courthouse for $72,000; and the election board costs since this year is an election year and 2013 was not at a cost of $140,000.

The bottom line is this: The county has been budgeting/spending well over what it brings in with taxes and other revenue for a number of years. And while that sounds like a bad thing fiscally, in reality, it benefits everyone in the county because — thanks to the riverboat — the county has the means to make up the difference. And now it has the means to continue to make up the difference even if riverboat revenues are cut off.

Unless the council significantly cuts services (think ambulance, fire and law enforcement) or hikes everyone’s taxes, there’s no way around using $2 million, or some figure close to that, each year either from the community fund or other riverboat gaming funds to shore up the General Fund. Using riverboat funds to balance the budget at the end of the year is nothing new; it’s been going on since I began covering the county council in June 2007.

This council has decided to use the community fund instead of direct riverboat gaming funds, as was the previous practice. In those years, the council would complete the budget, see how large the shortfall was then budget riverboat gaming funds to make up the difference, essentially doing the same thing as the current council, just from a different pot of money.

The only problem with the old method was, if the budget/revenue estimates were off, they’d find themselves in the hole at the end of the year (happened on more than one occasion).

Luckily, the estimates for 2013 were very close to reality.

With the community fund method, the council at least stayed in compliance and continues to provide the services residents have come to expect.

I’m not saying to give the councilmembers a pat on the back for having a surplus at the beginning of the year, but they shouldn’t be raked over the coals for their reluctance to raise taxes, reduce emergency services and shed employees.