A Barton County Commission split on raising the mill levy for the first time since 2004 and concerns about slashing spending narrowly approved publishing the county’s proposed 2012-2013 budget Monday morning.
The spending package, worked on by commissioners and other officials since June, calls for total spending of $18,247,405 from a tax levy of 34.927 mills based on an assessed valuation of $268,256,071. In 2012, the total was $17,850,398 with a mill rate of 32.558 and a valuation of $257,270,901.
The budget also includes budget cuts and/or static spending by county departments. In addition, there is a 2-percent, across-the-board pay raise for county employees.
The proposed levy is the highest since 2009 when the levy was 33.810.
But, “we are asking ourselves the wrong question,” commissioner John Edmonds said. “Where can we reduce expenditures to live within our means.”
With the nation on the verge of slipping back into recession, a lingering drought and falling oil prices, he said now is not the time for what he calculated as a $1 million tax increase. Instead, he suggested cutting the 5.6-percent and avoid a hike in the mill levy.
There is another nagging problem for the county. Last week when presenting the 2012 county audit report, accountants from Adams, Brown, Beran and Ball warned the commission about spending down the county’s reserves. The county started the 2011-2012 budget year with a reserve balance of $15,489,000, had a revenue of $20,731,000, but spent just over $24 million. This left an ending reserve balance of $12,076,000.
“The auditors stated that they felt the commissioners needed to either raise taxes or reduce expenditures,” County Administrator Richard Boeckman said. “What the auditors said was not new information.”
Before leaving, former county Budget Director Janet Crane prepared a report outlining the impact of the level mill levy on county revenues. She projected that had the mill levy remained at the 2009 rate of 33.810, the county would have lost $931,601 in revenue in the past three years.
Adding in a loss in sales tax linked to the property tax, and the total loss is just over $1 million. “This does not take into consideration revenue losses due to reduced motor vehicle taxes, loss of interest or other factors,” Boeckman said.
Revenue is one side of the equation, Boeckman said. The other side is expenditures.
The commission approved a 5 percent spending cut in 2010 and 2011, but not in 2012. None the less, “most departments are spending at the same level as in 2009, despite the fact that over those years there have been increased costs,” he said.
There have also been pay raises, and increases in health insurance and retirement expenses. “The net result is that the decline in revenues have not been offset by similar declines in expenditures,” Boeckman said.
In her report, submitted in March, Crane recommended a 2.9 mill increase. Boeckman ran her numbers past accountants at ABBB and elsewhere who all concurred with the assessment.
To rely solely on budget cuts would mean slashing around a million dollars in spending. “Is that practical?” Boeckman said.
By state statute, the county government provides many services to all other governing bodies in the county at no cost to them. And, Boeckman said, Barton County has fewer employees who are paid less than do most similarly sized counties.
“It is difficult to see where the commissioners could realize enough savings through expenditure cuts  to realize savings approaching $1 million in 2013 without significantly impacting services, perhaps to the point the county could not perform its statutory functions adequately,” he said.
Even with the increase, Boeckman said Barton County will be in the bottom 10 percent of mill levies in the 105 Kansas counties.
Had the levy not been lowered in 2009, the county administrator said the current recommended increase may not have been necessary. But, he said the economy was in recession “and the commissioners wanted to do something to help the taxpayers. It made sense at the time.”
“Since then, the decision has impacted county finances,” he said. “Unfortunately, if the county is to stop spending down its cash, the commission needs to either dramatically cut expenses or raise the mill levy.”
No one disagreed about the need to rein in spending, and Commission Chairman Homer Kruckenberg echoed Edmond’s sentiments.
But, “I believe the county has been and is being run in a very efficient manner,” said commissioner Don Cates. “The proposed budget reverses the tax drain.”
The residents he’s talked to have indicated they are willing to pay a little more rather than lose services. He said the current plan would raise the tax burden on a $100,000 home by $27 per year.
Boeckman did say the proposed budget would stop the bleeding from the reserves, but would not begin to replenish them. That would require another year or two.
He did commend the commissioners for their efforts. “This is truly the commissioners’ budget,” he said, referring to their input into its formulation.
“This budget represents as lot of hard work and compromise,” commissioner Jennifer Schartz said in backing the plan. “I’m good with this budget.”
Edmonds and Kruckenberg voted against the publishing of the proposal. Cates, Schartz and Kenny Schremmer voted for it.
This is just the next step in the budget process. Boeckman will make his official budget presentation at a budget hearing Aug. 13 prior to the start of the commission meeting.
The county can agree to spend less than the proposed budget as published. But, should they want to spend more, the budget would have to be re-published.