The Truth About the Alachua County Budget

by mike byerly, alachua county commissioner

Your county budget is undergoing some serious changes at the hands of the new “conservative” Alachua County Commission majority.

Each year, the Property Appraiser determines the market value of all taxable property in the county and reports this to the County Commission. The County Commission then applies a rate, the millage rate, to this total in order to produce the budget for the coming year. The budget and the millage rate are not the same thing, and can’t be used interchangeably.

If property values decline, but the millage rate stays the same, then the budget will decline by the same percentage as property values. So, it’s possible to increase the millage rate while actually reducing the budget.

This is what happened last year, and the year before.

The budget for the current year’s General Fund (by far the county’s largest fund) is $127,423,057.

Property values are projected to decline by about 3.4 percent this year. To maintain the same actual budget next year, the millage rate would have to be raised 3.4 percent. This is the course I supported. Commissioners Lee Pinkoson, Susan Baird and Winston Bradley voted to keep the millage rate the same, which will now require that the budget be reduced by 3.4 percent, or about $4.4 million.

Bear in mind that even our radically conservative state legislature recognizes the necessity of indexing a budget to population increase and inflation. In Alachua County, population increase and inflation for the coming year are projected to erode around 5 percent of the budget’s purchasing power.

In other words, maintaining the same budget next year would result in an effective 5 percent reduction in the County’s ability to provide services. Add the proposed 3.4 percent reduction resulting from the proposed millage rate, and the proposed budget declines some 8 percent in just one year.

Property values have declined modestly for each of the past three years. However, this follows a huge, market-driven runup during the real estate speculation of the mid-2000s. So even with the recent declines, countywide property values are still 25 percent higher than they were just five years ago.

To make a ridiculously complicated story as short as possible, Florida’s counties are going to have to start making substantially higher payments to the state for the federal Medicaid services that their residents receive. In Alachua County, this will mean approximately $3.4 million more next year, $2.4 million more for three years following that, and then about $1.2 million more per year from then on.

Lastly, one of the first principles of sound budgeting is that you don’t use a ONE-TIME SOURCE OF MONEY (“found” money) to fund an ANNUALLY RECURRING EXPENSE because the expense will still be there next year, but the money to pay for it won’t.

The County Commission has always reaffirmed this principle by vote at the beginning of each budget year, and that vote has always been unanimous. This year, Comissioners Pinkoson, Baird and Bradley have changed course.

In total, the proposed budget uses about $5.4 million in one-time sources to fund annually recurring expenses. Next summer, as the new Commission begins to build their budget, they’ll start with the same millage rate and the same program expenses, but will have about $5.4 million less to work with.

It’s easy to cut taxes if, instead of making corresponding budget reductions, you just put it on next year’s tab. The real pain will start then (unless that Commission finds another clever way to kick the can down the road).

The following are some highlights from the budget now on track to be approved by a majority of the County Commission as we’re going to press.

  • First, not all of the budget is being reduced. The Sheriff’s Office, alone among all county departments and constitutional offices, will once again receive an increase. About $1.8 million in new money will fund new positions at the jail and in administration, along with an assortment of capital improvements. This means the reductions everywhere else must be correspondingly deeper.
  • Next, the politically easy part for the Commission: for the fifth straight year, County employees will receive no raises or cost of living increases. There are consequences, of course. Both in Alachua County and across the state, salaries in the private sector and in peer public sector agencies have been rising steadily for the past four years, including at UF and the City of Gainesville. Alachua County is becoming uncompetitive. Morale is in the tank, and the County continues to hemhorrage talent and experience to other governments, the private sector and early retirement. The same budget generates less productive work each year.
  • The County will pay for this year’s $3.4 million Medicaid expense by raiding the CHOICES program, which the County attorney now holds can legally be done. This is a ONE-TIME SOURCE OF MONEY being used to fund an ANNUALLY RECURRING EXPENSE. This action is not only fiscally irresponsible, it’s unethical; this is clearly not what the voters had in mind when they approved CHOICES.
  • Each year, unspent funds in all departments and constitutional offices countywide are returned to the County’s budget and form the starting point for building the next year’s budget. The County Commission has elected to take $1.4 million from this revolving amount in order to balance the budget this year. This is another ONE-TIME SOURCE OF MONEY being used to fund an ANNUALLY RECURRING EXPENSE.
  • The Community Agency Partnership Program (CAPP) will be reduced by $175,000, a 15 percent cut. CAPP is the program through which the County provides assistance to the poor through contracts with a variety of private, nonprofit agencies that are already doing this work. CAPP emphasizes assistance to children and the elderly. Every dollar provided by the County helps to leverage the grants and volunteer support these nonprofit agencies are able to generate, and so they’re able to provide these services more cheaply and effectively than the County could. CAPP is in the Department of Community Support Services, which will also receive an additional $138,000 reduction, including two positions in the Poverty Reduction program.
  • The Department of Court Services will eliminate two positions, a reduction of $112,000. This department operates a variety of programs to divert non-dangerous offenders from the County jail, including parole, substance abuse and mental health counselling, work release, community service, Drug Court and Teen Court, and day-reporting. A recent departmental analysis estimates that without these services, the current average daily jail population of approximately 993 would instead be approximately 1,715. Of course, long before the jail population reached that level, we’d be legally obligated to build a new jail pod. Previous estimates cited in County Commission hearings for the cost of a new pod begin at $30 million and go upwards rapidly from there.
  • The Environmental Protection Department will be reduced by $50,000, which will include reductions in water quality monitoring and prescribed fire for County conservation lands. A half-time GIS analyst will also be eliminated.
  • About $420,000 is being “reduced” in the General Fund by reassigning certain expenses to a different fund, the Municipal Services Taxing Unit, or MSTU. It’s still in the budget, but will now be paid for only by residents in the unincorporated portions of the County who pay the MSTU.
  • Lastly, the Gas Tax funds the operations of the Public Works Department, and declining consumption of gasoline is steadily driving down revenues to this fund. If this trend continues, as we believe it will, the County will have to supplement the operations of Public Works from some other source (the MSTU would be the most appropriate). This year, to restore a $526,000 decline in Gas Tax revenue, the budget proposes to delay capital expenditures and reduce reserves (which will have to be restored). In other words, ONE-TIME SOURCES OF MONEY will fund this RECURRING ANNUAL EXPENSE.

This is one of the most important upcoming public hearings, on the second floor of the County Adminstration Building: Sept. 25 at 5p.m.

Attend if you can.

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