Dec 8, 2003 By Paul Sunyak 7 min read

The Fayette County commissioners will unveil a proposed 2004 budget today that shows a projected $400,000 deficit with some employee layoffs and a $737,000 deficit without them, according to Chairman Vincent A. Vicites. While Vicites is hopeful of further whittling down the expenditure side to bring spending in line with projected revenue, thus avoiding the need for layoffs or a tax increase, his fellow commissioners have differing views on how to handle the looming deficit.

Commissioner Ronald M. Nehls supports a small real estate tax increase, in the range of one-quarter of a mill, to balance the budget without being overly austere. Nehls likens his position to the bold and visionary leadership of the South Union Township supervisors many years ago, when they made a politically unpopular but wise decision to bring sewerage to their township.

Offering a third way to close the gap, Commissioner Sean M. Cavanagh supports laying off 20 to 30 employees, noting that anything less is just an attempt to appease many row officers while making property owners foot a higher bill than needed.

“I’ve advocated that (layoffs) a few years ago, but I’ve never been able to get my way on those cuts,” said Cavanagh. “If you don’t do it now, (the budget’s) going to get out of control … I have to worry about protecting a row officer, who may have to (personally) work harder, or the needs of a family that may have to pay higher property taxes.”

Vicites, sticking to his annual December mantra that raising taxes is a measure of last resort, said that “some very difficult decisions” lay ahead to close the gap but he’s confident that further belt-tightening can get it done.

“At this point in the process, I would rather look at all the expenditures and not just layoffs (to balance the budget),” said Vicites. “I’m keeping all options open on the expenditure side. …As I’ve always said, a tax increase is a last resort. I won’t know the answer to that until I have completely exhausted all the cost reduction efforts on the expenditure side.”

With the no-layoff budget that currently has a $737,000 deficit, Vicites said the county would be spending approximately $17.95 million in 2004. He added that estimated real estate tax revenue for the coming year is a shade over $8 million. Real estate taxes provide a big chunk of county revenue but are not the only source of money.

Chief assessor James A. Hercik, CPE, said at a recent commission meeting that the total assessed value of the county decreased slightly from 2003 to 2004, mostly due to the settling of some large tax appeal cases involving Nemacolin Woodlands Resort & Spa and the Bruderhof Communities, both located in Wharton Township.

Nehls said that the projected deficit, which recently stood at an even higher $2.3 million figure, could be cut in half, which would still necessitate the need for a slight tax increase to balance the budget.

By state law, the county must adopt a balanced budget by the end of this year. Cutting spending, raising taxes, or a combination of the two can accomplish this.

Nehls said his plan would result in a $6 to $9 annual tax increase for the typical property owner – and noted that he’d prefer a tax increase to laying off employees.

“In my opinion, I think we’re probably going to have to have a tax increase,” said Nehls. “If my colleagues say, ‘No way,’ I’ll probably have to go along with it. But I’m not for cutting positions. …I think there’s some meat to be cut out of (the budget). But we’ve really got to sharpen our pens and pencils.”

Vicites said that county manager Warren Hughes, who’s talked with all three commissioners, served as a catalyst to pare the $2.3 million “wish list” deficit to the more realistic $400,000 to $700,000 range. Vicites said he wants the proposed budget to be as realistic as possible, setting the stage for serious negotiations during the 20-day public comment period before a final budget is adopted.

“I want this (budget) shaped up and realistic before we go proposing anything,” said Vicites, who’s crafting his eighth county budget. “This one will be as tough as the others, maybe a little tougher. But they were all difficult.”

Cavanagh, who’s also putting together a budget for the eighth time, said he remains committed to not raising taxes for the third year in a row. Hiking taxes, particularly in the first year following the countywide property reassessment, sends the wrong message to taxpayers, he said.

“If you don’t put the brakes on now, the train will be out of control. What this means is, when the train crashes, Joe and Joann Fayette County will be in charge of cleaning up the mess,” said Cavanagh. “If we don’t make the necessary cuts now, the budget’s just going to balloon and balloon over the next few years.

“I want to put the brakes on it right now. And that means there needs to be some layoffs.”

The county’s millage rate for 2003 was 2.5151 mills. But now that the reassessment has been implemented, the commissioners are free to set a tax rate of their choosing, which can range up to 25 mills.

One thing all commissioners agree on is the need to reduce health care benefit costs, which Vicites said are projected to rise 18 percent this year. County employees currently pay nothing toward their health insurance, but Nehls said the contract with the Service Employees International Union, the county’s largest bargaining unit, permits reopening to discuss that issue for 2004.

“I think they’re going to have to pay some,” said Nehls. “It’s minor compared to what a lot of people are paying (elsewhere) but if we’re going to get through this (coming) year without a tax increase, it’s an absolute must in my opinion.”

Cavanagh said, “The union must give concessions. In the real world, people contribute to their health care. The days of getting a free ride on health care are over. Because if they don’t start (paying part of the premium), the property owners will pick up that tab.”

Vicites said he plans to meet with the county’s health care consultant “to discuss all the options’ within the next several days. “I’m definitely keeping all options open there,” he said.

Cavanagh said he fears that all the hand wringing over the budget amounts to a shell game that masks the fact that without employee layoffs a tax increase is inevitable. He joked that Nehls, who recently switched his party registration from Democrat to Republican, should be reminded that the GOP favors tax cuts.

“They don’t raise taxes. Someone should remind Ron that he’s a Republican now,” said Cavanagh, who added that Vicites always protects his political flanks at budget time. “Vicites always says, ‘I will not raise taxes, only as a last resort.’ But that’s one of his tactics. He wants to be in the political favor of these row officers and other people.”

Vicites said that part of the problem in balancing next year’s budget comes from higher expenses that he voted against – starting with an extra $100,000 per year from the switch to a new human resources provider.

“There were things that I voted against during the course of the year that got approved that created additional expenses throughout the year. But the majority rules,” said Vicites.