Despite warnings of a projected $300,000 budget shortfall last December, the McCreary County Fiscal Court has dodged a major bullet and has ended the fiscal year without any unpaid bills and avoiding a financial crisis.
During a special called session of the McCreary County Fiscal Court Friday morning, Judge Executive Doug Stephens revealed that the potential crisis for the county had been averted as enough additional revenue had been gained coupled with savings in other areas to allow the Fiscal Court to pay all bills and end the year with no debt beyond long-term commitments carried forward.
During the meeting, wherein the Court met to approved the 2017-18 budget, Stephens commented that all bills for the fiscal year are paid, and the only debt being carried forward into the next fiscal year would be long-term recurring bills, such as lease and bond payments.
That was a striking difference to the looming specter of a massive deficit first presented as a possibility at the end of last year when the Court was informed that projected revenues were not expected to cover expenses by the end of June.
Judge Stephens noted that additional income from the occupational tax (about $121,000), and extra revenue from the Payment in Lieu of Taxes from the government (about $278,000), provided enough funding to allow all monthly bills to be paid to close out the fiscal year.
The PILT payment also allowed the County to close out a $200,000 debt from the Road Fund. The Fiscal Court borrowed the money at the start of the last fiscal year to allow them to pay up-front costs for insurance coverage.
The additional revenue, along with savings in other areas, was apparently enough to close out the current budget with no debt.
“We scraped every dollar we could,” Judge Stephens said.
“This is the healthiest our budget has been,” Treasurer Mark Sewell added.
Last month signs that the increased income may be helping came when Judge Stephens noted he expected to be able to pay all “mandatory” bills, but cautioned that some non-essential bills faced the possibility of being carried over in to the next fiscal year.
The announcement that the County faced a major deficit sparked a months-long debate over ways to raise revenue or cut costs, which included the possibility of an insurance premium tax and an increase to the occupational tax rate. Fiscal Courts typically only have three means of increasing revenue: property taxes, occupational taxes or the insurance tax.
More than 150 citizens, upset at the possibility of an insurance tax, attended a special meeting of the Fiscal Court at the end of January to voice their objections over the proposal.
At that meeting representatives from the Department of Local Government were on hand who informed the Fiscal Court that the current budget was “unsustainable,” and the County faced the possibility of the State taking over local finances until the issue could be resolved.
While the insurance tax proposal did not come to pass, the Fiscal Court did amend the Occupational Tax Ordinance to add an additional half percent to the rate, which was expected to add an additional $500,000 to the budget annually.
The new rate took effect April 1, the final quarter of the fiscal year, and was not expected to produce enough revenue on its own to solve the impending crisis.
With the passage of the new rate, the additional revenue is to be dedicated toward paying for the housing of prisoners in other counties facilities.