Lagging revenues force county to cut $4.1M from budget

Disappointing revenues from sales taxes and fees mean El Paso County will have to make $4.1 million in spending cuts before year’s end.

County commissioners heard the grim news in a third-quarter budget work session Thursday, and County Administrator Jeff Greene called the Finance Department’s findings “earth-shattering.”

“Our mill levy (for property taxes) is not set appropriately and we have become too dependent on sales tax,” Greene said. “When we do have a downturn in the economy, it has adverse effects on municipal and county governments.”

County administrative budgets have been frozen, Greene said, but across-theboard cuts are not viewed as an option for dealing with this year’s shortfall.

Specific solutions to the shortfall were not addressed at Thursday’s work session, though there was talk of “reduction in services.”

Sales tax collections through the end of August are almost 5 percent below what the county predicted this time last year in preparing the 2007 general fund budget, which is about $119 million.

Also, an economic downturn has meant a reduction in recording fees collected by the Clerk & Recorder’s Office, resulting in an estimated $700,000 shortfall.

Higher fuel costs hit the Sheriff’s Office and the county’s fleet management especially hard this year as well, county staff members said.

Reserve funds have been drained in the past four years to what officials said are an uncomfortably low level, compounding the problem this year.

“A reduction of this magnitude (in previous years) did not have as much impact as what we are currently facing,” Finance Director Nicola Sapp said.

Commissioner Douglas Bruce questioned why staff members had not recommended making cuts earlier in the year, especially when sales tax numbers started showing a shortfall in May.

Monthly reports on sales tax revenue come in to the county from the state 60 days after the end of each month, affecting the staff’s ability to quickly respond to shortfalls, Sapp said.

She also said that, in light of an already lean budget, it would have been fiscally irresponsible to recommend cuts prematurely when in previous years, sales tax revenues have rebounded in the second half of the year.

“If we knew in July what we know today we would have been before you making a request that we need to amend the 2007 budget,” Greene said.

On Nov. 1, county commissioners will meet again to decide on final cuts to this year’s budget.

CONTACT THE WRITER: 636-0232 or carlyn.mitchell@gazette.com