Lincoln County kicks off difficult budget process

As the 2015 budget cycle looms for Lincoln County, commissioners are anticipating holding spending to current levels and avoiding draconian cuts to bring the budget into balance.

The commissioners hope to ride out the uncertainty of this year with the aid of available reserves while identifying additional revenue sources to bridge the gap between spending and revenue.

“The budget is stabilized for now, but we are still deficit spending,” said Commissioner Greg Larson.

A large part of the budget uncertainty is the availability of Secure Rural Schools funding. That federal program provides an average of more than $2 million to the county’s annual budget, but is subject to annual Congressional appropriation. Congress failed to reauthorize the funds in 2014.

Commissioner Mark Peck proposed using reserves for the coming fiscal year, which begins July 1, in the hopes of having better information about the long-term viability of revenue sources for the county. Those sources include a long-term commitment from Congress for the Secure Rural Schools funding, increased timber and mining receipts from the Forest Service and other measures being considered at the state and federal level to help stabilize county budgets in Montana and nationwide.

Peck expressed concern that making heavy cuts this year would force the county into even more expensive measures next year, should any of the possible increases in revenue take place this year. The other commissioners agreed, and decided to take a “hold the line” stance in their instructions to county department heads as they prepare their budgets for the coming year.

The commissioners began the budget process at a meeting on March 10, where they informally determined the priority of items to be discussed. The commissioners had a list of several items to consider in reference to this year’s budget.

The most important item on the agenda was the 20 mill reduction allocated to repay the over-taxation that rocked the county during past years. That repayment is estimated at more than $700,000 for FY2015, which is a direct deduction from available revenues for the coming year. The comsioners decided to continue the repayment, although there is no legal requirement that it be done this year.

“If at all possible, we need to honor that and get it off the books,” said Peck.

The other commissioners agreed and determined, preliminarily, to continue the repayment this year while the county has enough reserves to maintain the commitment.

Staff expenses were another high-priority item, especially in relation to the escalating costs of health insurance. The county is anticipating an increase in health insurance premiums this year, but the exact amount won’t be known until May.

Other staff-related expense items to be discussed are cost-of-living increases for staff and a potential hiring freeze. The commission decided a strict hiring freeze did not serve the best interests of the county, as there are essential positions that would require replacement in the event of staff departure. The commissioners decided to evaluate all hiring on a case-by-case basis, with department heads presenting any needs to the commissioners for approval before hiring replacement personnel.

Two other items that were rated high in priority by the commissioners were capital expenditures and the prioritization of services.

The commissioners decided to open a more long-term look at the county’s finances by looking at capital expense plans for each appropriate department. They want to create a schedule for replacement of expensive equipment and for larger, more expensive projects. This long-term planning will allow for larger expenses to be planned into future budgets and help alleviate the problems caused by sudden large needs.

Service priority is another item of importance on the commissioners’ agenda during budget talks. Specifically, commissioners will be looking at the services provided by the county and making decisions between necessary and unnecessary services. As revenue shrinks, the county will likely be cutting services deemed unnecessary in an attempt to balance budgets.

The commissioners will be discussing the budget every Tuesday from 9 a.m. until noon during the month of March, and will extend that if necessary. The commissioners have scheduled a number of milestones for this year’s budget process. The first major milestone will be the department heads getting budget packages to the commissioners for review. Those are tentatively due May 6.

Lincoln County Clerk and Recorder Robin Benson will compile the various department budgets and tentatively have a preliminary budget ready for commission review by May 27. The commissioners hope to have a preliminary budget published for public review by June 30 and will schedule public meetings to discuss the budget in Troy, Libby and Eureka.