Dec 29, 2004 By Paul Sunyak 4 min read

As the Fayette County commissioners ponder ways to eliminate a $7 million deficit in the 2005 budget, the only unanswered question concerns the size of the likely real estate tax increase – not if it will come. But the county’s fiscal situation isn’t going to be solved when the commissioners approve a final budget on Thursday.

That’s because internal work papers show that next year’s spending plan includes only a $1.1 million interdepartmental loan repayment – a legacy of the waning days of 2003 – in terms of addressing what Commission Chairwoman Angela M. Zimmerlink considers a $4.5 million deficit stretching back to the year before she took office.

And whether one uses Zimmerlink’s belief that the $1.1 million is not part of another $1.9 million in 2003 deficit spending or Commissioner Vincent A. Vicites’ belief that it is, the bottom line is that the county still needs to address millions in unpaid debt.

According to a summary sheet circulated by Vicites, the bulk of the projected $7 million deficit in the proposed 2005 budget is attributable to costs unrelated to prior-year deficits.

Vicites says $5.9 million of that total – including $3.5 million in operating cost increases in areas including salaries and benefits – is basically an increase in the cost of doing business as a government entity.

The total also includes $1.5 million to purchase new voting machines, as mandated by the state, $250,000 as a one-year boost in tax collector compensation, $116,000 to cover repayment of Great Meadows Amphitheater sales proceeds put into the wrong account and $430,000 for courthouse renovations.

But unaddressed in the 2005 budget are a 2003 deficit of either $1.9 million (Zimmerlink’s belief) or $897,000 (Vicites’ belief), a projected 2004 deficit of $1.5 million to $2 million, and a projected $2.4 million deficit for 2005.

To Zimmerlink, the situation confronting the commissioners represents the day of reckoning for years’ worth of accounting practices and interdepartmental borrowing that masked the true financial picture.

“It’s the typical ‘rob Peter to pay Paul’ scenario,” said Zimmerlink. “The $1.1 million (in 2003 loans) was repaid using (2004’s) tax anticipation note. But now that money needs replaced in the budget.”

While a 2-mill tax hike essentially would cover the $7 million hole in 2005’s budget, it also would increase county real estate taxes by 80 percent for all property owners.

Zimmerlink said she favors a smaller tax hike, perhaps 1 mill, that would cover the essentials and set in motion a more reasonable deficit-whittling plan spread out over several years.

Pointing to the same summary sheet distributed by Vicites, Zimmerlink noted that under the 2-mill-hike scenario, the county essentially would have nearly $3 million extra to spend in 2006, since it wouldn’t have to do things like repay $1.1 million in loans or buy $1.5 million worth of voting machines.

That’s money that Zimmerlink said she simply doesn’t want to leave on the table, knowing government’s appetite for swallowing tax dollars.

“Just from working in the courthouse for one year, I know that no one will look at cost reductions (in 2006),” said Zimmerlink. “When you have money set aside, it will be spent, and I’m not ready to do that.”

Basically, Zimmerlink said that having such a huge surplus “wouldn’t be right,” so she favors adopting a 2005 budget with a smaller millage increase, thus eliminating any potential 2006 tax revenue windfall.

And since the county got into its deficit problem over several years, Zimmerlink said it makes sense to get out of it the same way.

Vicites said that all options remain on the table, as far as dealing with the 2005 budget and solving the deficit dilemma.

But he also pointed to the summary sheet’s projected 2005 year-end deficit of $2.3 million, and noted that the $3 million in extra 2006 revenue would cover that cost completely with some money left over.

“I think we need to look at all the options we have,” said Vicites. “I don’t want to go two mills (as a tax hike) if I don’t have to.”