Butler County personnel costs increased 20% since 2022

The general fund tax budget for next year is structurally balanced, meaning planned operational spending matches recurring revenues and carryover - which should reach $157 million - isn’t required to pay bills. The commissioners have required a structurally balanced budget for many years.

County Administrator Judi Boyko said the early estimate – the final budget won’t be passed until December – shows expenditures will increase 4% and revenues are anticipated to grow by 4.7%.

Credit: Nick Graham

Credit: Nick Graham

She told the Journal-News the tide appears to be turning which is good, because in recent years projections showed, “the rate of the expenses is increasing greater than the rate of the revenues.”

“As our expenditures increase, which they have over the past couple of years mostly due to inflationary influences, we still remain very vigilant about that revenue/expenditure ratio,” she said. “This proposed tax budget was the first year in several years that revenues increased at a higher percentage than the expenditures year over year.”

Last year, Boyko warned the commissioners that if spending and revenue collections continue to grow at the current rate, the county’s budget will require carryover to balance in 2030.

Boyko told the Journal-News when they receive the budget requests from the various elected officials and department heads they scrutinize them “to ensure whatever they’re requesting to be funded can be sustainable,” especially new programs.

Credit: Nick Graham

Credit: Nick Graham

“This board of commissioners has been approaching our operations based on what services we need to provide in the context of what we can afford,” Boyko said and later added they are always “mindful of not only the rate of increase in expenses but also the scope of those expenses.”

Where the increase is going

The 4% expenditure increase amounts to $4.9 million and the bulk of that, around $3 million, is going for merit raises. She said several offices within the justice system are moving 12 positions from other special fund categories into the general fund, which accounts for another $1 million. The rest is mainly due to a contracted health insurance increase and some other elected officials doling out raises above the recommended 3%.

The general fund is the main operational fund, but there are a number of entities that rely on outside resources such as state and federal funding, service fees like water and sewer and independent tax levies. All funds combined, the total spending plan for next year amounts to $488.2 million.

The county expects to have available resources totaling $266.2 million in the general fund, but Boyko is recommending the commissioners keep nearly $90 million — about nine months worth of operating expenses — in reserve as a precaution.

Also built into the budget is the $16 million budget stabilization fund, $15 million for the capital reserve fund that is financing space reutilization projects, $6 million for capital projects and $5 million for the county engineer’s annual paving program. That leaves a $14 million ending cash balance.

The largest general fund budget increase was 35% or $443,126 in the Area Courts. Court Administrator Jeannette Bullard did not respond to questions about the increase, but her budget submission indicated they are moving five employee salaries from the special projects fund to the general fund.

Commissioner Cindy Carpenter said all the other office holders and departments sacrificed when the commissioners needed help balancing the budget several years ago, so the increases don’t concern her.

Credit: Nick Graham

Credit: Nick Graham

“We can afford it,” she said. “When we asked people to work to help support the general fund when we needed it they did. So I’m okay with it”

On the other end of the spectrum, the Board of Elections submitted a tax budget with a 12% reduction because they won’t have to conduct a presidential election next year.

Tax break for county residents?

With the healthy budget outlook Commissioner Don Dixon told the Journal-News it hasn’t been discussed yet because it is so early in the budgeting process, but he wants to see them give taxpayers another break.

Finance Director Dave McCormick said he didn’t budget the windfall in the spending plan because, “Butler County budgets revenues conservatively. Typically, there needs to have been actual experience in/results from collecting new revenues before they will be included in a budget.”

Credit: Nick Graham

Credit: Nick Graham

In 2022, the county rolled back the entire $18 million property tax collection. This year they waived the estimated $6 million property tax windfall they could have collected as a result of the average 37% property value hike.

“It’s a good possibility, our revenues are so strong we’ve tended to do it in the past and I’m sure it’ll be discussed,” he said adding “I don’t think it’ll be the $18 million again but it’ll be substantial if we do it.”

The commissioners historically have not discussed tax breaks until it comes time to pass the final budget and it will take official action to waive the tax revenue. Carpenter said she is open to discussing a tax break.

Sales tax revenues continue to climb

Property taxes aren’t the main revenue source, sales tax is the engine that drives county government and collections jumped 32% from 2020 through 2023. They have budgeted $56.5 million for next year. According to the Ohio Department of Taxation, the county has collected $29.5 million in the first six months of this year.

Officials here were concerned all of the federal pandemic relief dollars flooding into people’s pockets might skew their sales tax numbers, but collections haven’t waned as the federal funding has expired.

Income on investments have also exploded, growing 316.6% from $2.6 million in 2021 to $10.8 million last year. This revenue source is directly tied to interest rates and the county has collected $6.5 million as of May and budgeted $8 million for next year.

Providing services

While the finances continue to be healthy, Dixon said he is still concerned about the high cost of providing services, especially in the post-pandemic “new normal.” It has prompted many county officials to bump salaries several times outside the normal merit raise program, to try and retain and attract employees.

Personnel costs in 2020 and 2021 were $55.2 million and $62.9 million respectively but they were offset by federal pandemic relief monies. The true cost in 2022 – after the federal funds dried up - was $70.6 million and they have budgeted $85.3 million for next year which is a 20.8% increase.

Dixon said there isn’t much they can do about the high costs, “with the cost of living and everything else it almost has to stay where it is.”

“COVID has impacted the salaries and at one point in time you couldn’t get any help and people were paying crazy salaries and crazy prices just to get people in and keep things moving,” Dixon said. “But once it’s set where it is it’s pretty much going to stay, because it’s very hard to reduce wages when they ‘ve been in place for a year or two.”

And the cost is going to grow because all six sheriff’s union contracts will be negotiated next year. The sheriff has the biggest general fund budget by far at $49.3 million penciled in for next year, which is a 6% hike.

In 2022 renegotiated contracts were estimated to cost roughly $1.3 million up to $2 million, depending on a number of factors. Chief Deputy Anthony Dwyer told the Journal-News they are in the process of collecting competitive data to see how their people measure up to the market to prepare for negotiations.

The pandemic hit the policing world really hard and it has been difficult everywhere to attract and retain people. Dwyer said this will undoubtedly impact contract talks.

“Every police agency is having a hard time recruiting and retaining police because of the environment,” Dwyer said. “I’m sure that’s going to come up because we’ve seen significant increases in contracts in other places. So we’re going to have to really look at that and what the comparables are.”

Dixon said right now they are trying to navigate the “new normal” and budget accordingly.

“This is the new normal, we’re trying to get our arms around how to contain the costs where they are now, we’re still in good shape, thank goodness we have budgeted conservatively,” Dixon said. “We’ve kept pushing our economic development projects, our sales tax income has steadily, steadily increased. But right now we’re at the point we have to say stop, catch our breath, we have to be able to hold where we are, we can’t go any further.”

Right-sizing government

Commissioner T.C. Rogers has been saying for several years they need to make sure county government is right-sized both people-wise and in terms of facilities.

Credit: Nick Graham

Credit: Nick Graham

“I’ve been saying for the last two years we need to look at the future of what size government does a county of this size need to be,” he said. “You just can’t keep going up and up and up and up. So we’re taking steps to address that.”

They have already begun attacking the facilities side of the equation with the space utilization plan. With another $15 million infusion next year the budget to right-size is $45 million.

There are separate buildings for the Board of Elections, Children Services, Developmental Disabilities, Care Facility, county engineer, health department, the Juvenile Justice System, the Mental Health and Addiction Recovery Services Board, the morgue, OhioMeansJobs and the Probate and Area Courts. The sheriff’s office also has three jail facilities and the dispatch center.

“What we’re doing now with trying to consolidate our real estate and also our operations, we’ll be more efficient with our buildings which we have,” Rogers said.

The plan is to empty the old Administration Center at 130 High Street, moving the county auditor and recorder’s office into the Government Services Center and the development and water and sewer departments to the former Developmental Disabilities Board building on Liberty-Fairfield Road and Ohio 4.

The plan also includes about $25 million to build new facilities for the coroner and the sheriff’s dispatch center on the Princeton Road campus where the Board of Elections resides.

The health department will also move in with development and water and sewer. The OhioMeansJobs office in Fairfield is going to share space in the Vora Technology Park where the new Miami University and Butler Tech advanced manufacturing facility will be housed.

Boyko and McCormick will begin meeting with the various entities that receive county funding soon to fine-tune the budget. In October the commissioners hold budget hearings with all the office holders, independent boards and department heads. The final budget is usually passed in December.