Fiscal prudence a must for Aiken County in 2009

From the Aiken Standard


'Fiscal prudence a must for Aiken County in 2009


1/4/2009 12:17 AM

By GARY BUNKER

Guest columnist

The current financial crisis and continued uncertainty about the economy have prompted several of my constituents to question me regarding Aiken County's financial stability. Is Aiken County vulnerable to the budget cuts and layoffs that we've seen across the country at the state, county and municipal levels? Will revenue fail to meet expectations? What is the risk that services will be cut?

In the short run, the outlook is good. Aiken County is financially sound and has a greater than 90-day cash reserve. Unlike the federal government, Aiken County can neither run budget deficits nor print or otherwise create money out of thin air to meet its obligations. State law requires counties to be far more fiscally conservative than the federal government.

Revenues for the 2008/2009 fiscal year, however, will be less than what was budgeted in June. The reasons are straightforward: state aid to Aiken County has been slashed by approximately $600,000, interest on the county reserve funds has plummeted, vehicle taxes are down and fewer fees are being generated due to the housing slowdown. On the other hand, property and sales tax revenues will likely hold steady.

Aiken County will work to avoid dipping into its reserves this year. Though we're experiencing the "rainy days" that these reserves were meant to guard against, it's still possible to keep expenses below the reduced revenues.

Some opportunities remain for savings this year. Aiken County uses a lot of gasoline (Sheriff's Office, Public Works and EMS) and the budget assumed $3.75 per gallon. The price of gas has plunged below this amount, and if current trends continue this will offset some of the decline in revenue. Where will gas prices go? Nobody knows - but Aiken County is benefiting from current prices.

In addition, there are other "dials" that can be turned to hold down spending: delay or defer items in the capital projects fund, delay filling vacancies, delay or reduce merit raises, extend the road scraping schedule, etc. The key point is that no layoffs are planned and no significant reductions in county services are contemplated.

The bigger issue is next year's budget. Some economic experts declare that the worst of the crisis is over, others are certain that another Great Depression is imminent, and the rest are scattered across the spectrum. Frankly, no one knows what the future holds. The crystal balls have rolled off the table and cracked. This makes planning difficult.

The nightmare scenario is that revenues drop dramatically next year, which in turn necessitates a tax hike to keep basic services running. Aiken County isn't a wealthy county. While there are individuals and neighborhoods that do very well, there are also many citizens who struggle to make ends meet. An increase in property taxes in conjunction with growing unemployment will create great hardships for many families.

What does this mean in the short run? For starters, Aiken County must not overextend itself this year. The line must be held on spending by starting no new programs and being careful about adding additional funds or personnel to current operations. Prudence and retrenchment should be the watchwords.

No matter how worthwhile increases may be at the moment, we must keep focused on the fact that revenue next year may be tighter than this year. Terminating or cutting back on a program is far more painful than not starting the program in the first place.

Therefore, any increases - even for popular programs such as the Aiken County EMS, the proposed animal shelter expansion or junk yard fences - should be carefully considered. If additional spending is truly necessary, then County Council should phase-fund the spending over two or three years instead of committing to it all at once. New spending in critical areas should be offset by reductions in less critical areas.

Again, going halfway out onto a limb exposes both the county and the taxpayers less than rushing out to the tip in one bound. The further out we go, the harder it is to pull back.

The art of governance is about making choices between limited resources and unlimited wants and needs. At this point in time, saying "no" is far more fiscally prudent than saying "yes." We shouldn't commit to anything today that we may have trouble paying for tomorrow.

Gary Bunker is a member of Aiken County Council representing District 7.''