The Morgan County Council is trying to avoid dipping into their rainy day fund to cover what same council members say is a $650,000 deficit, and a recent property tax increase won’t be enough.
“If we take the deficit out of our savings account, we have two years (left). Part of our responsibilities (as council members) is to close that gap somehow,” Councilman Roland Haslam said. “We have to figure out somewhere to cut items. We have to start somewhere.”
At their Jan. 16 council meeting, Haslam proposed a 5 percent budget cut across the board in all county departments to pay for the deficit. But Councilwoman Tina Cannon said not all 2017 revenues have been collected, and so the exact deficit cannot be determined yet. An estimated $230,000 in sales tax revenues should come in in February; $42,800 from the city and school district; and $15,000 from the state; along with people paying late property taxes.
“The amount of sales tax we receive doesn’t cover the services we provide,” Councilman Austin Turner said.
Council Chairman Ned Mecham said the $400,000 in unpaid 2017 property taxes is one of the county’s largest, that could “trickle in” for the next five years.
County Attorney Jann Farris said that the council creating new employment positions the last couple of years has led to the shortfall.
The county had to unexpectedly pay SLC Pipeline $189,000 after a centrally assessed lawsuit claiming the pipeline was appraised too high.
Another culprit was Weber County, who has always provided Morgan with 911 emergency dispatch services and increased Morgan’s cost by $280,000 annually in 2016.
Cannon said that lack of commercial property tax could be a cause as well.
“Residential property taxes will never pay for itself. They use more in services than they will ever pay in tax. At the same time you grow your residential tax base, you have to grow on the other side commercially,” Cannon said. “It is important to have that balance between commercial and residential. Diversification is needed. There has to be a way to diversify the tax base or you will continue to have this problem long term. We have painted ourselves into a corner.”
“We have to start getting out,” Haslam said. “You can’t grow the (commercial tax) base in two years.”
Councilman John Barber, who joined the meeting by telephone, said if more economic development had been done in the past, “we wouldn’t be here” discussing revenue shortfall. “The cow is already out of the barn. We are short that money.”
Councilman Robert Kilmer said employee salaries and benefits make up more than half the county’s $6.78 million budget, at about $4.5 million. “You are talking about a situation where all our money is spent on people to provide the service rather than the service,” he said.
Many agreed that there was not many places in the budget to cut.
“We run very, very lean,” Cannon said. “There is not fluff in these budgets.” She noted that the EMS department needs new equipment, roads are falling apart, and the library is running “lean.”
“Have you seen anyone being extravagant in the building?” Farris asked the council. “Are you going to cut our office supplies?”
Councilman Austin Turner said he was willing to cut his own pay by 50 percent in order to make up the difference.
“I am willing to take the hit,” Turner said. “When we all joined up, it wasn’t for what we are getting paid now.”
Cannon said putting off employee cost of living raises could hurt the county in the long run.
“It is not wise to underpay employees so they have an incentive to go somewhere else,” Cannon said.
“Why do you make promises you don’t know if you can keep,” Kilmer asked Cannon. “You make a decision now on anticipation that more revenue is coming in. What if it doesn’t?”
On Dec. 6, the council voted to increase property taxes by over 28 percent effective for 2018’s tax payments.
The council unanimously voted Jan. 16 to not reduce budgets or make changes to employee compensation until final 2017 budget numbers can be provided by the county clerk and treasurer, possibly by the next council meeting Feb. 6.
“I want to see where we are at before we spend money,” Mecham said.
If the economy falters as it did in 2008, “you will have to make tough decisions quick,” Cannon said.
“I would like to find out more numbers before we make decisions,” Kilmer said. “Cutting council salary is and easy decision. The tough decision is what we will be faced with here.”
In the meantime, Cannon said the council should review revenue projections as compared to the budget every month in order to “know if there is a drastic difference from what we have projected.”