Lehigh County Ended 2010 With $5.4 Million Surplus
Cunningham says it’s too soon to think about rolling back portion of 16 percent tax increase.
Lehigh County closed the books on its 2010 budget with $5.4 million more than it anticipated, but taxpayers shouldn’t expect a refund check anytime soon.
County Executive Don Cunningham announced the surplus Tuesday at a news conference, crediting county employees for coming in under budget in such areas as the Cedarbrook nursing home and the courts.
“We’ve saved this $5.4 million in lots of little different line items, nickel by nickel, dollar by dollar over a myriad of areas of the county government operation,” Cunningham said. “It’s because our managers held the line, they’ve not filled jobs where they didn’t need to be filled and not expended money if they didn’t need to spend it.”
The county’s workforce of 2,122 is the smallest since 1990, he said.
Cunningham said it’s too early to think about rolling back any of the controversial 16 percent tax increase that went into effect for the 2011 budget. The county had planned to use all of what is remaining in its tax relief fund -- $4.3 million – to plug a budget gap this year. Now it can save that money in case it’s needed next year. The surplus will bump the county’s “Rainy Day Fund” up to about $25 million. That reserve is part of what earns the county an Aa1 bond rating, which allows it to borrow money at a low interest rate. “You don’t want to operate with no savings, no cash reserves,” he said.
Last fall’s tax hike meant that a homeowner with property assessed at the county average of $60,000 (half of what the home is valued at) would pay $714 in property taxes this year, or $99 more than last year. Those tax bills have already gone out for this year. If the county were returning the entire $5.4 surplus to the taxpayers, the average homeowner would get a check for about $33, officials said.
“Let’s see where we are a year from now, if we can sustain this type of budget, if we see revenues increase with some increased economic activity, then we can have that discussion if we can adjust the tax rate,” Cunningham said.
Part of the difficulty in making accurate budget projections is early deadlines for the spending plan, he said. Lehigh County’s Home Rule Charter stipulates that the executive must send the budget to commissioners by August 31 and the commissioners must act on it by Oct. 31. That’s earlier than municipalities and Northampton County. When the state goes past its June 30 deadline for passing its budget, it makes the county’s job that much more difficult because the state contributes money to running the courts and human service agencies, for example.
“In these times you need to be conservative and you need to have some cushion because there’s so much unexpected about what’s going to come out of Harrisburg or Washington,” Cunningham said.
The tax increase has become the central issue in the Republican primary race for four at-large county commissioners seats. Four of the eight GOP candidates have formed a slate aimed at unseating Commissioner Chairman Dean Browning, who voted with four Democrats last October to reject sending the 2011 budget back to Cunningham for steep cuts.
After Tuesday’s news conference, Browning said he’ll push to see that the surplus is used to avoid another tax increase next year, rather than adding back funds for programs, such as Growing Greener fund money, that were cut this year. Revenue for 2011 had been projected at $106 million and expenses at $110 million. The $4.3 million tax relief fund was a one-time option for plugging this year’s budget gap, he said.
“Many times were only have six months of data and we’re required to project the last half of the year,” Browning said. “We need to apply that $5 million to avoid another tax increase in 2012.”
Among the savings in the courts, about half came from not filling vacancies and half from state giving performance bonuses that are hard to anticipate, said Tom Muller, county director of administration. The county has also been careful on filling vacancies at Cedarbrook, he said.
The Children & Youth agency bumped up caseloads from slightly under 15 cases per caseworkers to about 17 and has supervisors overseeing more caseworkers, Muller said. Both changes still leave the agency in line with state recommendations, he said. The change allowed the county to eliminate positions by attrition.