Parker County Judge Pat Deen discussed his proposed budget Thursday, which plans to address a deficit in the current budget as well as decrease the total tax rate by 1 cent.
“What we’ve come across is that the previous judge [Mark Riley] and the commissioners adopted a budget that had a requirement in it that draws $5.6 million from the general fund to balance the budget. We were not aware that was the case, so this poses some issues,” Deen said. “Our immediate need is to get that taken care of and taken off where we don’t have a deficit in our fund balance. You do not remove funds from the general fund to balance a budget, so that’s what we’re having to deal with.”
As the current budget cycle continues, Deen said immediate action needs to be taken, which includes lowering expenditures by freezing raises in salaries, delaying capital projects and working with departments to significantly reduce budget requests.
“We’ll have to make some tough decisions on this, but basically the bottom line is we’re still at three-plus million dollars that we’re going to have to be required to pull out of the general fund to balance the existing budget we’re in right now,” Deen said. “I’m sensitive to the fact that these employees need raises and if we can do it where it makes sense, then we’ll do it, but when you have a deficit, you have to look at things from a business standpoint.”
With all the recommendations in lowering expenditures, there is still about a $1.3 million deficit that will need to be addressed by the commissioners court, Deen said.
“We worked into the night, multiple nights, to get this done and going through everything with a fine-toothed comb and the numbers are accurate and we feel very confident. These are taxpayer funds and we are doing everything in our power to make sure we are being prudent with these expenditures and making sure the funds in our budget are essential funds. Any non-essential, we’re probably going to try and hold off until we get this thing under control. The sky is not falling, the county is in a good financial position in having reserves above the 90-day threshold.”
The fund balance dropping below the 90-day threshold would place the county at risk of jeopardizing its current transportation debt and affecting its AA+ bond rating.
“There just simply needs to be some steps made where we’re not reliant on pulling from the general fund. That cannot happen,” Deen said. “It’s not sustainable over time, it doesn’t plan for future growth and needs you’re going to have.”
Deen said he will recommend moving forward that policies and procedures are adopted to prevent balancing a budget by reducing the general fund balance except under extreme circumstances.
Parker County Auditor Brianna Fowler said it is the county’s duty to be fiscally responsible.
“Going into the budget sessions for fiscal year 2020, we are taking a proactive approach to protect the financial health of the county, while also ensuring that each of our department’s operational needs and statutory requirements can be achieved by the budget set forth,” Fowler said. “This presents a challenge as we are a growing county with both increased needs and continue to have unfunded mandates pushed down from the state; however, it is our duty to be fiscally responsible and adopt a budget that maintains our fund balance to protect the county’s strong bond rating.”
According to a document on the county’s website, the proposed budget will raise more revenue from property tax than last year’s budget by an amount of $6,582,195, which is a 14 percent increase from last year’s budget. According to the document, $2,224,700 or 34 percent is tax revenue to be raised from new property added to the tax roll this year. Of the total amount collected, new property tax will provide $1,343,022 to the general fund maintenance and operations, $466,651 for the lateral road and bridge fund and $415,027 for debt service.
Taxing entities have an effective rate and a rollback tax rate. If property values go up, the effective rate goes down. The rollback rate is the maximum tax rate above the effective rate that is allowed by law before voters must approve a new tax rate. Compared to last year’s $0.38 effective rate, this year’s effective rate would be $0.34.
Deen is proposing a total tax rate of $0.37 compared to last fiscal year’s $0.38.
“There’s a key component here that comes in on economic development and the most important thing to me is putting value on the ground in brining in high-wage job growth,” Deen said. “You’ve got to have revenue streams and the revenue stream right now continues to be taxation, but if we can focus on key economic development programs in getting that value on the ground with good, high-wage job growth, we can get where we need to go without taxing our people so badly.”
Budget workshops will be planned for this month and September moving forward and information will be presented to the commissioners court.
“The buck stops with me and the commissioners court. We need to take immediate action to insure the financial health of our county is maintained,” Deen said.