Wednesday, August 26, 1998

Moderate tax hike needed for juvenile facility

In commenting on Taylor County commissioners' proposal to raise homeowner's taxes by 8 percent, an editorial in the Abilene Reporter-News on Sunday erroneously said commissioners had used fund reserves to pay for capital improvements in the past, thus holding back inevitable tax increases. In fact, commissioners have budgeted some cash reserves to help fund operating expenses, not to pay for capital improvements like the new county jail and Expo Center expansion.

Using cash reserves to help cover operating costs in recent years has enabled commissioners to set lower tax hikes than they would otherwise have had to do, although taxes have been raised slightly each of the last three years. The price of bond issues such as the jail and Expo Center, naturally, adds to the overall expense of county government and eventually makes its way to taxpayers via the tax rate. But cash reserves themselves were not used to pay directly for capital improvements.

Also, that same editorial said the county's fund balance has been depleted, and that does not seem to be the case. Commissioners had hoped to end fiscal 1998 with a balance of $2.5 million. Now, the actual figure looks like $3.1 million - hardly a depletion. The larger fund balance is due to some $350,000 in unexpected income gained by housing inmates from Jones County and the federal government and to an increase in the market value of some county investments.

Most of the county's fund balance exists on paper. Actual cash in the general fund is up $150,000 from last year to $1.2 million. The rest of the fund balance reads a certain figure, but some investments - poor ones made by a former county treasurer - probably couldn't be cashed in for the amount listed, even though they continue to produce revenue for the county in the form of interest. Plus, the fund balance would be higher now if cash hadn't been used to offset some expenses in the past. All of which means the status of the county's fund balance, if essentially healthy and within guidelines, is still less than crystal clear.

Cost average homeowner $21

What is clear from this somewhat arcane excursion into county finances, however, is that it's not a good thing to use up all of one's cash reserves to pay for immediate needs. That's why commissioners, while keeping the fund balance stable and trying to hold expenditures down, are calling for a moderate tax increase for next year that will cost the average homeowner about $21. The main expense fueling the slightly higher budget is the cost of operating the county's new juvenile facility.

Theirs is a reasonable request - just as it would also be reasonable to hold on to the lion's share of the county's $2.1 million chunk of the state's tobacco settlement. Despite the temptation to use that money to pay for operating expenses and avoid higher taxes right now, saving that windfall could make all the difference if the county is hit with a real emergency in the future.

The next public hearing on the county's proposed budget and tax increase is Sept. 1, 10 a.m., at the courthouse.