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County reserves must be preserved
, Staff Writer
03-03-2010
The county’s ability to compete for jobs could hinge on the amount of reserves it has in its coffers, Pulaski County Administrator Peter Huber said Monday.
He said the county was approached last week by a prospective business that could provide thousands of jobs. However, attracting the business could depend on the county being able to invest as much as $7 million in a building.
Therefore, using $5 million, or 45 percent, of the county’s $11 million in available reserves to cover a potential shortfall in the school system’s 2010-11 budget could leave the county unable to negotiate such a deal, he said.
Huber’s comments were made during one of two annual joint services meetings between Pulaski County’s Board of Supervisors and School Board.
He said the county is seeing more interest in economic development now than it has in a long time, so it needs to remain in good position to compete with other localities for business and industry.
Huber said $800,000 in reserves was used in the current fiscal year budget to replace the roof at Pulaski County High School, but that is essentially a one-time capital expenditure because it will not have to be replaced again for many years.
He has stressed repeatedly during budget discussion that using reserves to cover one-time expenditures for capital needs is okay, but using it to cover operating or other re-occurring expenditures can cause problems long term.
Most of the school’s $5 million shortfall – about $3.9 million – is in the operational budget.
Using real estate or personal property taxes to cover the shortfall would mean a 15-cent (31 percent) increase in the real estate tax or a $1.80 (84 percent) increase in personal property taxes.
This past weekend’s news that NanoChemonics has shut down doesn’t help the county’s revenue picture; particularly when the county stands to lose $200,000 in machinery and tools taxes from the closure of TMD Friction and Findlay Industries and $600,000 in state cuts.
