HOLLIDAYSBURG - Blair County is making plans on how to pay bills in October if it no longer has cash. But it will be broke in December with no alternatives, if state lawmakers don't reach a budget agreement until November, commissioners said Tuesday.
"The crisis is now ... and we have to begin planning," Commissioner Diane Meling said. "I have no faith that there's going to be any resolution."
Meling and Commissioner Terry Tomassetti were on the phone Tuesday morning with state Rep. Richard A. Geist, R-Altoona, who predicts that if the budget stalemate is not resolved this month, it will get "really ugly" in November when school districts need their state allocations.
But Blair County's future looks ugly now, based on commissioners' comments at their weekly meeting.
The county expects to come up about $500,000 short of paying October's bills, so it has asked banks for interest rates on a $5 million loan. But that loan won't be enough to cover all the bills through the end of the year.
The county has $2.5 million in reserve that could pay some additional bills, county officials say. But that money was set aside to pay the 2009 tax anticipation note of $4.5 million. If used to pay bills, the county won't have any money to put toward the note, due to paid by Dec. 31.
The commissioners say their end-of-year cash flow problems would be solved if the state comes through with a budget this month or next. But if the stalemate continues through November, the commissioners say the county will go broke, because it's their understanding that once a budget passes, it will take four to six weeks for checks to arrive in county accounts.
The commissioners sent letters last week to about 200 agencies and individuals, such as subsidized day care providers, attorneys, foster care parents and juvenile treatment facilities, stating that no more checks for their services will be issued until the state budget is resolved.
The situation prompts questions that solicitor Nathan Karn said he cannot answer.
"If we're not doing something or we're not providing a service we're supposed to and something happens, the county could be sued," Karn said. "But if we don't have the money ... it's beyond our control."
Tomassetti said the county faces a dilemma that Gov. Ed Rendell had a chance to address when he approved a partial budget permitting state employees to resume receiving their paychecks. The governor, Tomassetti said, could have included county-funded programs in his approval.
Rendell declined to approve more of that budget proposal, saying that it lacked sufficient money to preserve state-funded programs and that it needs an increase in the income or sales tax to balance it. Republicans oppose any type of tax increase.
Meling said the lack of a state budget is especially frustrating after a year of looking for ways to save money and making budget cuts.
"The county budget was in good shape until now," Meling said. "We've worked hard to spend within our means and to live within our means. ... This is a cash flow crisis and it's linked to the governor."