The county council is looking to tighten the purse strings.
Members met in special session on Tuesday afternoon to begin looking ahead at their spending plans through the year 2022. They’re expecting a drop in tax revenue due to the ongoing COVID-19 crisis — and they don’t want to wait until then to deal with it.
“It would be misleading to ourselves, to the county’s employees, (the taxpayers) if we allow them to believe that the impact of COVID is only immediate,” said council president Bob Lechner. “We don’t want them to wonder why, two years later, we’re still dealing with this.”
County officials likely won’t feel the full weight of the job losses resulting from the COVID-19 shutdown until 2022. That’s largely because income tax distributions and even things like assessed valuations are set at least a year in advance.
Lechner said the county should likely brace itself for a 10% drop in revenue in 2022 — maybe more, maybe less — and he’s encouraging officials to take steps now to soften the blow.
“We have options,” he said. “One is to operate as normal between now and 2022, not worry about it until 2022, at which point we’ll have to make whatever cuts are necessary.
“The other option is to do as the state does, which is to look at a biennial budget where we plan for a shortfall in 2022.”
Lechner likened it to “flattening the curve,” which was largely what steps taken to combat the COVID-19 were all about — reducing the spike in hospitalizations associated with the coronavirus to give the healthcare system more time to plan.
And he also pointed out that the COVID-19 crisis is far from over; revenue shortages could increase if cases continue to rise or another surge is felt this fall.
The expected drop in income tax funds won’t be first felt until 2022 because revenue from 2020 is based on income rates in 2019. Revenue in 2021 will be based on rates from this year and so on and so on.
Assessed valuation of property, too, is expected to drop but is already set for next year. The impact of that drop won’t be felt until 2022 either.
So they began work Tuesday on a document — a memo of sorts — that will be sent out to officeholders and department heads on what to expect moving forward.
They can’t really submit a biennial budget as state officials do, but they can do a sort of 2-year projection.
And the first change they plan to make, Lechner said, is to take a “sharper look at additionals” — requests from officeholders and department heads for money beyond what has been budgeted for them.
“We can’t cut out all additionals,” Lechner said, pointing to necessary expenditures like gas bills. “But we should take a look at a policy where we encourage all officeholders to limit any additional other than in emergencies.”
“Effective immediately?” asked councilman Randy Crismore.
“Yeah, after we approve it in July, I think,” said Lechner.
“And I think most officeholders, particularly knowing the circumstances, are going to be willing to do whatever they can,” he said. “I want to believe that.”
The department heads will begin drafting their spending plans on July 1, and the council thought it best to offer direction sooner rather than later.
“So we send out a memo telling them to try to not go above and beyond their budgets,” said councilman Jay Yochum. “And if they do, they should be aware that the answer could be, 'No.'”
“Yes, we’re just letting them know that there will be more scrutiny moving forward,” Lechner said.
But that isn’t the only change officeholders will need to get used to.
The council is asking them — at least for right now — to stick with their 2020 budgets moving into 2021 and 2022, or “flatlining” their current spending plans.
They also agreed on Tuesday to look for every opportunity to cut employment through attrition.
“We could probably make it with fewer employees countywide,” said councilman Harry Nolting. “There are places we could make cuts if we had an opportunity.
“I’m not saying we go around firing people,” he said.
“But it’s lot easier not to fill a position,” said Crismore.
In the end, the council directed their financial advisor, Ben Roeger of Conrad & Company, Indianapolis, to work alongside county attorney Andrew Porter to reflect their wishes in a kind of legal document, one that will be sent out to officeholders and department heads next month.
“We just want to help elected officials get their budgets together,” Lechner said. “Giving them guidelines now will be a lot easier than having everybody submit what they want and having to cut them to get it back down to where we need to be.”