Cambria budget $1.7M less than 2013; no tax increases
EBENSBURG – By a 2-to-1 vote Thursday, the Cambria County commissioners adopted its $60 million general fund budget for 2014 and moved to close on a $5 million loan to pay off its yearly tax anticipation note.
President Commissioner Douglas Lengenfelder said the 2014 budget was the third passed by commissioners without a tax increase and was $1.7 million less than 2013’s budget.
County Controller Ed Cernic Jr. was uncharacteristically quiet throughout most of the commissioners’ meeting, leaving it
to Commissioner Thomas Chernisky to provide dissention as the lone no vote.
While the budget contained a lot of good points, he said, like increased funding for the Cambria County War Memorial Arena and equal funding from 2013 for the John Murtha Johnstown-Cambria County Airport, he couldn’t support the budget because it slashes $150,000 from Pennsylvania Highlands Community College.
Lengenfelder noted the college’s annual $1 million in funding from the county and said the funding cut would be made up in other ways, but Chernisky said just because money is budgeted
doesn’t mean an agency actually receives it.
Chernisky’s comment was a nod to the several millions the county has borrowed from its agencies this year to protect against a year-end budget shortfall.
It’s money which has not yet been paid back.
“I don’t want to take any money away from education,” Chernisky said.
He later remarked that, had funding to Penn Highlands been restored, he would have voted yes.
“I think the money was there for that,” he said.
Chernisky also was the lone no vote on a three-year pharmacy contract with Express Scripts Inc. He said that, after speaking with the county’s health care committee and noting problems with the past year, he didn’t want to lock Cambria into a three-year contract with no way out.
Lengenfelder noted that the county already had been using Express Scripts for years and that it was a good deal and expected to save tax dollars.
Not to be left out, Cernic used an opportunity at the meeting’s end, when the commissioners were discussing the holidays, to say that Christmas really is the season to believe: in phony numbers, a bad budget and anticipated tax revenue which will not be received.
“It’s the same old story,” Cernic said. “We shouldn’t be in a position where we cannot pay off our tax anticipation note.”
Commissioners announced at a Dec. 5 meeting that they had reached an agreement with First National Bank for a $5 million loan to pay off the remaining half of the county’s yearly $10 million tax anticipation note loan, to be repaid over the next eight years, and had secured debt restructuring to repay the county’s $19 million debt by lowering the interest rate and shortening payments from 17 to 15 years.
Lengenfelder said the new agreement also will decrease the county’s $10 million loan to $5 million from now on, saving over $100,000 in annual interest and fee payments.
Cernic had criticized the move, saying the loan was only “kicking the can down the road” on the county’s budget problems, including a new problem this year of being unable to pay off the tax anticipation note.
Cernic also said the budget’s projected tax return of 98 percent is unrealistic, skewing the entire revenue stream to make it seem like there will be more money coming in than the county will really receive.
“In the 10 years I’ve been here, we’ve never been near that number,” he said.
Lengenfelder said $1.5 million is the difference between a 93 percent tax-collection rate and the 98 percent rate the budget anticipates.
Between delinquent tax payments and back taxes, the county receives an additional $1.6 million after those tax payments come in, he said.
“We’re not trying to make anything up,” in the budget, he said.
But with $6 million borrowed earlier this year from county agencies and $3 million in unpaid bills, Cernic said budget shortfalls will continue to be an issue.
“I don’t want to be the grinch who stole Christmas,” he said.
He stopped short of saying that a tax increase would be a good way to help solve the county’s budget problems but said there are several ways to improve the county’s financial outlook, which the commissioners haven’t considered.
Chief Clerk Steve Ettien said Cernic is right about the figures and promised that the agencies and bills will be paid but said the county budget is not as simple as balancing a home checkbook.
Lengenfelder also said budgeting at the county level involved a lot of guesswork.
He pointed to the county’s eight murders this year, which required more police investigations, extra resources devoted to the courthouse and more manpower on both ends, as an example of unforeseen expenses.
And with the county losing an average of 1,000-plus residents per year, the continuation of a seven decadeslong trend, the county also must work on downsizing as a result of the 2010 U.S. Census, which saw Cambria County downgraded from a fourth- to a fifth-class county.
Lengenfelder said leaders are looking to cut back and work toward a smaller size without “kicking people to the curb” or raising taxes.
“We need to focus on making sure that we’re working on creating … opportunities to create jobs in this county.”
Commissioner Mark Wissinger also stressed the importance of jobs.
“We’re trying to put our money where our mouth is” by supporting authorities and business leaders, he said.