As Oneida County gets ready to take up its 2020 draft budget next month, it’s clear that most Oneida County supervisors, with a few notable exceptions such as supervisor Billy Fried, are just content to ignore all the fiscal red flags around them.
And there are quite a few of them flapping in the courthouse winds.
As we report in today’s edition, on its face the 2020 budget looks pretty good. Most important, there’s a tax rate decrease, and the budget does not resort to extremes, such a trying to impose wheel taxes or calling for referenda to exceed levy limits.
But that summary is not the real story. The real headline is that this budget masks years of fiscally risky practices that sooner or later are going to catch up with the county and its taxpayers.
Hey, no problem, though. When the other shoe finally does drop, it will be future taxpayers who will bear the brunt of this recklessness, and most of today’s supervisors will be long gone, so they won’t feel the wrath of those taxpayers.
The biggest beef with this budget and this board is that the county absolutely refuses to cut unnecessary spending, both in operational programs and capital improvements. Because they refuse to do so, the county is already in a deep hole. It’s just that right now they’ve covered it with clever camouflage, making it a concealed trap taxpayers will fall into down the road.
To wit, they’ve covered up their budget mess in two basic ways. First, they insist on taking revenues that are not imherently recurring and using them to balance the budget. When the year finally rolls around that those revenues don’t recur — and that year will come — the county will have to come to taxpayers with their hat in hand.
The budget hole will be so big, it better be a 10-gallon hat.
The second major way the deteriorating condition of the county is concealed is by borrowing. That’s something the county has generally avoided in the past, but this year it looks like $4 million will be borrowed for capital improvement projects, with total costs to taxpayers of $4.4 million to $4.7 million.
Taxpayers won’t see that in their 2020 tax bill, but they will starting in 2021.
To be sure, borrowing cannot always be avoided, and a huge sheriff’s department radio project that is definitely needed is a large part of the reason for the need to go into debt in 2020. The problem is not that specific need, but the general trend toward more and more requests for capital improvements in recent years that show no sign of ending and, if it continues, will force the county into ever more borrowing.
As county finance director Darcy Smith has pointed out — to be clear here, she’s straightforward when she has concerns and forewarns supervisors about possible consequences down the road, so they cannot say they aren’t warned — capital improvement spending from the general fund grew from $309,000 in 2015 to $906,000 in 2016 and $886,000 in 2017 to $1.3 million in 2018 to $2 million in 2019.
There’s the even greater growth in 2020, $2.3 million from the general fund and $4 million in borrowing, while another $3.6 million is already in the queue for 2021.
This kind of spending is simply not sustainable. The county has a five-year plan but those who write it cannot apparently envision the very next year. Before this year’s budget process, supervisors had never seen 10 of the CIP projects taken under consideration.
So much for planning.
In committee meetings, supervisor Robb Jensen is fond of saying that the county board has a hard time saying no. That’s true: Supervisors, including Jensen, hardly ever say no.
But at least we didn’t raise taxes, they say.
The thing is, they are raising taxes. Borrowing money is simply a tax levied in future years for future taxpayers to pay. The money has to be repaid, and with interest. And the tax on the money borrowed this year will begin to take its toll in 2021.
So, again, let’s be clear: This budget doesn’t raise taxes by just $91,000. It raises taxes by $91,000 plus about $4.4 million.
As for using the general fund to balance the budget, government auditors may have the county’s back on this, and other governments do it, but it’s a practice that is going to blow up in their faces and needs to stop. Supervisors should stop it in November.
Sooner or later that money is not going to be there. That day will come when state inmates are no longer housed in the county jail, and/or stumpage revenue slumps as it is this year, and/or interest rates stay low or sales taxes fall, and/or some combination thereof, including the possibility of a sizable emergency or unexpected significant expense.
The county’s general fund is already showing signs of stress with increased CIP spending, and a serious slump in revenues and/or major unexpected expenses will make for the perfect storm. Of course, when that day comes, the county’s budget hole will need dramatic filling.
It will have been years in the making, but the bottom will seemingly fall out overnight. No matter. The attitude seems to be, we’ll deal with it when that happens. That’s when we’ll cut away the dead weight and, in the meantime, we’ll backfill our budget holes with borrowing.
Bad idea, for a variety of reasons.
First off, any borrowing comes with interest. That’s just taxpayer money flushed down the fiscal toilet.
Second, paying for programs the county cannot afford with revenues that might not be there in the future — to the tune of at least $550,000 in 2020 — almost guarantees that core government functions and personnel will be compromised when that day comes.
It’s almost guaranteed that taxes won’t be able to be raised enough to cover the hole the county will have dug for itself, especially given levy limits, and so that’s when the extreme decisions will have to be made. That’s when the wheel taxes and fee increases and referenda will come.
Whether paying for the sheriff’s department or for roads or for the UW Extension, the county will try to distribute the pain all around. Every year that the county carries a needless program or position makes it harder to cut that program or position. What the county will be doing then will be pitting worker against worker, and making core government personnel and functions compete with low-priority and non-mandated programs.
That’s already happening. It happened in the budget hearings, and it was just a glimpse of the future. This year, the county’s initial budget recommendation headed into the hearings called for keeping the UW Extension at a cost of about $200,000 but cutting employee health insurance benefits countywide (higher premiums, higher deductibles, higher out-of-pocket costs, depending on the plan) to offset $287,000 in increased health insurance costs for the county if the plan remained the same as in 2019.
The bottom line is, the plan design changes transferred all the increased costs for health insurance to employees and would have made for a substantial overall compensation cut, even with Carlson Dettmann raises and even for core workers such as law enforcement.
A number of sheriff’s department deputies and staff showed up to protest, and they were right. Cutting their health insurance was the county’s way of showing gratitude for officers who put their lives on the line for ours every day.
One deputy, to cite just one example, was a single mom who tearfully told of her child’s need for surgery and that she was contemplating a second job to stay afloat. Do we really want those who protect us to have to take second jobs?
Their compelling presentations caused the administration committee to rightfully reverse field.
They reconsidered, but to restore the $287,000 to have a zero impact on needed and core employees, the county did not attempt to cut wasteful spending, such as the $200,000 the UW Extension costs, and other programs, too, but continued to play games by covering with revenues that might not be there in the future.
And it did so after two county efficiency studies ranked the non-mandated UW Extension and its programs at the bottom of the list in county priorities, and after the county’s more recent funding opportunities committee confirmed that the UW Extension was the lowest ranked priority for the county, with all programs ranked 146 and below in importance.
But Oneida County just can’t say no. Every year supervisors talk tough about cutting programs and personnel, and every year they never do. That is to say, except for Billy Fried, who steadfastly and repeatedly called out the need to reduce wasteful spending that the county can’t afford. He followed his talk with actual motions, most of which failed.
He deserves kudos for trying, and so do the deputies and staff of the sheriff’s department who spoke to the issue and from their hearts. The message from the sheriff’s department rank-and-file was clear: Don’t use us to subsidize nonessential programs. Don’t sacrifice us, and don’t sacrifice public safety. And they were absolutely correct in their assessment.
Deep down, supervisors must know their budget trickery is unsustainable, and simply hope they will be long gone when the sky falls. Maybe they will be, and maybe they won’t, but the scene at the courthouse was as close to an employee rebellion as you can get without actually having one.
That said, the sheriff’s department’s presentations will be a walk in the park when the county can no longer kick the can down the political road.
When that day comes, they won’t be able to kick the can because that road will be filled with employees and taxpayers alike, rising up, and it will not be a pretty sight.