With the economic recession, many counties will experience a reduction in property values for this year. This will create a serious dilemma: Either 1) increase the tax rate or 2) reduce the budget. Most will, once again, attempt to reduce the budget to avoid increasing the tax rate during this crisis.
While most county budgets have already been cut to their minimum requirements to maintain services, counties are exploring some additional methods to reduce costs:
Interlocal Contracts: Shared services with cities and other counties may reduce administrative costs for each entity. Chapter 791, Government Code (Interlocal Cooperation Act) provides broad authority for these contracts.
Deferred Capital Expenditures: Many counties are postponing capital purchases, especially for equipment and vehicles. Unfortunately, this policy may result in increased maintenance costs to keep older equipment in service.
Equipment Leasing: Counties that have previously purchased equipment, such as computers and automobiles, may reduce the immediate budget impact by leasing. Of course, this may add additional financing charges to the total cost.
Mandatory Furlough Days: Since personnel constitutes the most significant cost category in the budget, counties can reduce their costs by requiring some non-essential personnel to take unpaid leave on certain days. Of course, some offices and services must be provided on a continual basis, and there will be an income loss suffered by the affected personnel.
Hiring Freeze: Some counties have instituted a policy to maintain vacancies in positions upon termination by present personnel. Exceptions are usually necessary for law enforcement and small offices. These policies require frequent budget amendments to delete the vacant positions from the budget unless all elected offices cooperate in the policy.
Hard times are definitely here. In addition to doing more with less revenue, counties must be vigilant to avoid more mandated services as the state struggles with its budget deficit.
For more information, please call me at 1-800-733-0699.