Editorial: Looming budget crisis a serious problem for Boyle Fiscal Court

August 15, 2004

It looks like the Boyle Fiscal Court has a serious problem.

Boyle County spent $674,000 of its surplus funds this year. That basically means that county government spent that much more money than it is taking in.

By the end of the current fiscal year which ends June 30, 2005, the county surplus is projected to fall to $200,000.

If the current rate of taxing and spending continues, that means that in the following fiscal year, 2005-2006, the county would be $474,000 in the hole.


That can't happen. Something's got to give. The county must either make drastic spending cuts or pass a fairly substantial tax increase.

But what to cut and what to tax?

On the cut side, the county can't make substantial, if any, cuts in its basic services, such as the jail, solid waste collection, road repair, recycling, snow removal, dead animal removal and animal control.

It could cut back further on its support for the many nonprofit and quasi-government organizations in the community. This year, the county cut $100,000 out of its funding for those organizations, which include everything from the Great American Brass Band Festival to the Parks and Recreation Department to the local senior citizens center. Even with the cuts, the county will still allocate more than $500,000 in this budget year to these organizations.

But even though they are not actually part of the county government, in many cases, these organizations are providing services that many people consider just as vital to the community. Taking care of the community's most vulnerable people - the young, the old, the ill, the abused - generally is something that county residents look to the government to do. So it's not going to be easy to take more money away from these groups.

The decision about where to raises taxes won't be easy, either. Even though the county tax rates on real estate and motor vehicles are the lowest in the state and the county payroll tax is the second lowest, raising taxes still will have consequences.

Politically, the most dangerous way to go would be to raise the property tax. That would anger a lot of local voters. So we weren't surprised when Judge-Executive Tony Wilder said Tuesday at a court meeting he would "prefer to keep the property tax low and raise the payroll tax." Magistrate Phil Simmons said he agreed. Raising the payroll tax was "the most fair," he said. "Sixty percent of our employees are from out-of-county," he said.

We're not sure about the "fairness" of the payroll tax but it is undoubtedly where the money is. Property taxes are hard to raise very much because of a state law that makes increases of more than 4 percent subject to a recall vote, and because of the county's large employment base, small increases in the payroll tax can produce considerable sums of money.

Yet, there are problems, too, with raising the payroll tax. Local industries are competing in a global economy. Tax increases on their employees put pressure on the companies to raise wages, which in turn makes the companies less competitive. Furthermore, some local companies already have received payroll tax breaks for various reasons. It doesn't make sense to raise the payroll tax for some companies and turn around and give breaks to others.

As we said, Boyle Fiscal Court has got a problem. Probably the "fairest" way to solve it would be to spread the pain around: Raise all of the county taxes somewhat and cut all of the various organizations that receive money somewhat. That might work if the court members do a good job convincing the voters of the fairness of their actions.

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