$9M shortfall awaits in '06, auditor predicts

A 2005 general fund deficit was averted this year by borrowing $7.3 million.
By WILLIAM K. ALCORN
VINDICATOR STAFF WRITER
YOUNGSTOWN -- Mahoning County is facing a $9 million deficit in its 2006 general operating fund that will require cuts in services and employee layoffs, said Auditor Michael V. Sciortino.
Eliminating next year's projected shortfall will require all department heads, particularly in the public safety areas, to be proactive in finding ways to reduce costs, the auditor added.
Sciortino said he singled out public safety, of which the county jail and criminal justice system are a large part, because they represent about 65 percent of general fund expenditures.
He said all departments must reduce expenditures to address the shortfall, however.
Sciortino praised county commissioners for negotiating solid waste tipping fees that will bring $250,000 to $300,000 into the general fund, but added that the county needs to do more.
Sciortino said he has been working with Sheriff Randall A. Wellington to review the finance plan for housing federal prisoners in the Northeast Ohio Correction Center on Hubbard Road, which Sciortino said could bring in $225,000 or more per year.
Also, the auditor believes a master contract with one vendor to provide the county's telephone system would generate $250,000 to $500,000 in savings.
Those and other actions will not come close to eliminating the projected deficit, however, he said.
Deficit avoided last year
A 2005 general fund deficit was averted, primarily by borrowing $7.3 million against anticipated revenue from the half-percent sales tax passed in the spring, which the county began collecting Oct. 1.
The $7.3 million note was needed to pay for the mandatory cap of 296 inmates at the county jail.
Also, there was a carry-over balance from 2004 of $4.6 million.
In addition, some $600,000 from various department accounts was freed up; and commissioners collected about $2.3 million in 2001 and 2003 cost allocations, which are fees charged to county departments for various items such as information and technical services, paid for out of the general fund.
He said, however, neither the $7.3 million nor a large 2005 carry-over will be available next year.
In fact, in January, $3.7 million of the $7.3 million note must be paid back, thus reducing available sales tax revenue from $28 million to about $24.3 million.
And, failing a boom in the economy, which would boost sales tax revenues, Sciortino estimated this year's unencumbered balance will be between $250,000 and $400,000.
"I anticipate zero to marginal growth in sales receipts the last quarter of 2005 and throughout 2006," Sciortino said.
General fund revenues for 2006 are expected to be about $42.3 million. Maintaining current spending levels in 2006 will total $51.9 million in expenditures, however, he said.
The county is facing a massive deficit in 2006 and the years thereafter Sciortino predicted.
"I just want people to understand where we stand financially. Next year will not be a picnic," Sciortino said.
alcorn@vindy.com