Reducing Costs Key to Budget
Posted 08-12-1996
One issue that I plan to examine on a regular basis in this forum is the composition and
management of the county government's budget. I am quickly learning that constructing and
managing a $170 million budget is truly a complex and challenging task. What makes the
task even more complex is that the county operates its budget on a calendar year, while
the Commonwealth operates its budget from July 1 through June 30, and the federal
government's budget year runs from October 1 through September 30. So the county must make
certain assumptions about revenue levels when planning for the future.
The sources for county government's revenue
are only partially generated at the local level. Approximately 26.2% or $44.6 million
comes from property taxes, 38.7% or $65.9 million come from state and federal revenue, and
21.8% or $37.1 million comes from departmental charges, the bulk of those being Medicare
and Medicaid reimbursements at Westmoreland Manor. Smaller sources that allow us to
balance our budget are: miscellaneous revenue (8.9%), investments (2.3%), and the drawing
down of fund balances (2.0%).
A historical problem that has existed since
1986 is the county has taken in less revenue than expenses and consistently used fund
balances to make up the difference. We are now in a precarious position because previous
Boards of Commissioners chose to tax at a level inconsistent with their level of
expenditures. They instead spent dwindling fund balances to balance the budget. We now do
not have large enough fund balances in reserve to carry out the same scenario again. We
either start exerting some serious budget cutting and discipline, or we raise taxes. I am
committed to fully explore the first option before considering the second. I believe a
serious, close inspection of each program and department can provide in some instances,
savings and in others, possibly increased revenues.
The commitment to change county
government's spending habits must start from the top and that is in the Commissioner's
Office. As I have said many times, I want to look at how we purchase materials and
supplies, how much we spend on contracted services versus doing things in-house, and I
believe we must have the discipline to not add employees. The Commissioners recently sent
a letter to all elected officials and department heads asking them to revue their
operations. I believe they best know their operations and where meaningful savings can be
found. I prefer this action to a general, across-the-board five or ten percent cut. Some
departments, like the Controller's are already doing more with less employees because of
the greater utilization of technology.
I hope our initial request prompts thorough
action. It seems to be working, as one elected official has already spoken of changing
scheduling to limit overtime and a department head has identified an area where we could
potentially save several hundred thousand dollars per year. I certainly want to look at
some of the areas directly under the Commissioners and will demand action to control
spending. In future articles I will provide updates of our progress and how that $170
million of our money is being spent. |
