Editorial: Revenue-neutral budget this year will be costly in the long term
Is meeting revenue neutral really that necessary? The Linn County Commissioners think so even though County Clerk David Lamb has explained to them that, if there was any year not to meet revenue neutral this would be the year.
With high fuel costs, inflation, and the planned addition of jail employees to the budget for 2023, the commissioners still want to pare down everyone’s budget. That comes even though Lamb has tried to explain that if prices continue to rise a revenue neutral budget cannot be sustained. The income has to go up or the reserve funds, services or employees will have to be cut.
Revenue neutral is a goal that current Kansas legislators set in 2021 to keep taxes down. At that time they likely didn’t realize that costs were going to rise drastically. And it’s doubtful they were considering that services might have to be cut to their constituents if mill levies stayed the same.
Is it reasonable or even realistic that Linn County, which is in the middle of a jail expansion with the completion of the new Justice Center, stay revenue neutral?
Last year, the county went under revenue neutral and that, along with increased valuation, is the reason that the revenue-neutral mill levy was set lower this year.
There is no punishment to the county for going over revenue neutral on next year’s budget except maybe criticism from taxpayers or legislators.
The mill levy is expected to drop for next year, simply because the county, cities and schools can receive more revenue for each mill levied because property values, at least for some property owners, have increased over the last couple of years.
That is not a fault of local government, though. The housing and farmland values have been on fire, and the value of real estate has increased – in some cases as much as 30 percent. By state statute, the folks in the county appraiser’s office are required to base their property valuations on market price.
The commissioners have already asked Lamb to put $300,000 of the American Rescue Plan Act (ARPA) funds into his proposed budget to cover increased health insurance costs and now are considering more funds from ARPA to cover a cost of living increase for county employees.
Lamb told the commissioners that using ARPA for the cost of living increases was just a temporary Bandaid and would most likely result in a large, possibly 10 mill, increase in two years when the county no longer had ARPA funds.
Of the $1.9 million dollars that the county is receiving from ARPA, more than $700,000 has already been spent or obligated. Some has gone for administration of the grant and the rest for installing broadband Internet on the west side of the county, which is underserved. These are the kind of things for which the ARPA funds were intended.
After a new ruling by the federal government on ARPA, the county declared the funds they were receiving a lost revenue even though earlier they said they had really not lost any revenue due to COVID. This allows these funds to be used for anything the county would spend money on. One idea was using the money for health insurance costs (arguably a reasonable cost stemming from COVID) and possibly a cost-of-living raise.
Many organizations and governments have raised employees salaries or given them lump sums of money with COVID funds. Employees did risk their health working through the COVID pandemic. Linn County employees covered their jobs well during this time. There is no doubt that they deserve a raise for their efforts.
But, just because the commissioners don’t want to be seen as spendthrifts, should those funds be used to give cost of living raises? Or should commissioners just say we have extenuating circumstances with a new jail and higher costs and vote to go over revenue neutral?
County employees definitely deserve the cost of living raise the commissioners are hoping to give them. But using ARPA funds will have long range consequences for taxpayers.
There are plenty of projects that the ARPA funds could be used for that would benefit residents. Road improvements and water quality have both been talked about during ARPA discussions and the development of the county’s new comprehensive plan. Could these funds reach more people by putting the money into improvements or services for the county?
For the 2023 budget, commissioners need to think strategically for the future and not worry about going over a revenue-neutral budget.