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Fayette County asks state for $5.5M loan as budget impasse continues

Spending, hiring freezes already imposed

By Garrett Neese 3 min read
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The Fayette County commissioners will apply for a loan of up to $5.5 million from the state Treasury Budget Bridge Loan program to help it weather the financial strain as officials wait for the passage of a state budget.

“We waited as long as we could in hopes that the budget would get passed,” said board Chairman Scott Dunn after Thursday’s 3-0 vote. “But we can’t wait any longer.”

Without a state budget, counties are responsible for funding certain essential services. Among those are the county departments that deal with behavioral health and child welfare.

“Every quarter that we’re not getting state funding, that’s about $3 million of state funding, just for (Children and Youth Services),” Dunn said.

A release from the county said state funding typically makes up about 30% of the county’s revenue. Up to this point, the county has been able to pay for mandated services through its general fund.

“We cannot continue to self-fund our mandated services,” Dunn said.

The county had taken earlier steps in response to the ongoing budget impasse. In August, the commissioners froze spending, leaving departments to operate as normal but stopping funding of extra projects or travel, Dunn said. That was followed by a hiring freeze in October, although that excluded some critical departments such as public safety, Dunn said.

At the start of the year, the county received a tax anticipation note of $9 million, following a practice that has been in place for at least as long as Dunn became a commissioner in 2019. To date, the county has only used $6 million of the note. Some of the remainder will be used to pay off the projected $35,000 in interest that would accrue from the loan if the county does not receive its state allotment by the end of the year, Dunn said.

Before the ongoing budget issue, the county had been under budget and anticipated a budget reserve at the end of the year, Dunn said.

Even before the state’s standoff, Fayette County had been looking at its finances, Dunn said, realigning offices and getting extra revenue through means such as housing federal prisoners and those from other counties. The county has also cut costs through means such as paying jurors through debit cards instead of checks, saving $16,000 in postage, Dunn said.

The commissioners have informally looked at areas for possible furloughs or service cuts if the budget showdown extends into 2026, but would try to avoid cutting in state-mandated areas, according to Dunn.

“We would have to look at cutting elsewhere so that we can continue to fund (Children and Youth Services),” he said.

He said the commissioners won’t increase taxes in 2026, and the county’s finance department is working to make sure the county will be under budget for next year as well.

“I anticipate 2027 not having one either,” he said.

In Greene County, board Chairman Jared Edgreen said there are no plans as of yet for any freezes or furloughs of the kind imposed in Westmoreland County.

Commissioners are watching closely to determine if they will ask for a bridge loan, and checking with the area’s state representatives to gauge how talks are progressing, Edgreen said.

“There’s no set value yet of what that loan would look like, how much it would be, but we’re closely monitoring it, and we may be in that situation soon,” he said.

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