The McCracken County Fiscal Court continued to explore options regarding potential revenue streams to solve its persistent budgetary shortfalls in the face of mounting pension costs and moved forward with transient room tax plans during a called meeting Wednesday evening.
A good portion of the meeting was devoted to rebutting Sunday's Paducah Sun editorial which urged the court to rethink its "tax-first approach in response to budget woes" by having Deputy Judge-Executive Steve Doolittle lay out the county's big picture financially.
After hitting a low point of $767,000 in its cash balance -- essentially the county's non-earmarked cash on hand -- in October 2018, McCracken County is projecting a deficit of $900,000 for the next fiscal year, with the potential for it to be higher due to the ongoing discussions of 911 system funding and the looming pension crisis.
Having paid approximately $750,000 into the state pension fund during the last fiscal year, Doolittle expects McCracken's payments to double by 2025.
"That's not the real bad news, the bad news is it gets much worse. By 2028, the pension for the hazardous duty employees will be 98%," Doolittle explained. "When you had the legislative forum here a couple of weeks ago, I didn't hear much relief coming or any real solution."
Doolittle continued: "Since 2011-2012, which was the high point of McCracken County finances, the cash balance has slowly dwindled every year to reaching the low point of last fall. I think we'll have a similar tightness of cash available to us this fall."
Commissioner Eddie Jones asked Doolittle about the validity of editorial's suggested methods of dealing with the shortcomings, which included focusing on economic development and seeing what the potential reevaluation of properties by the Property Valuation Administrator would yield. These solutions Jones called a "shallow analysis" and Judge-Executive Craig Clymer called "no good."
"There would be no immediate budget relief to McCracken County, even if we saw a large company come in here," Doolittle reasoned, due to the high likelihood of industrial revenue bonds and wage assessments affecting property and payroll taxes. "It would come from the impact of people building houses and businesses expanding to deal with that, but there would not be direct impact and nor would it happen immediately. It would take awhile before we saw it trickle in."
Commissioner Bill Bartleman hopes that the court's efforts in economic development will pay dividends.
"I think this fiscal court has been aggressive about economic development through sitting at the table with the city and the local economic development group to negotiate changes in how they operate," he said. "I think our results are going to be better than what they have been in the past."
The potential of the PVA reevaluations having a significant effect was deemed doubtful by both Doolittle and McCracken PVA Bill Dunn, who spoke briefly during Wednesday's meeting. More coverage on the PVA is expected in the following days.
The judge-executive also took issue with the editorial's questioning of their discussion of increasing taxes, which he believes is the only way.
"It's not sustainable to continue to pay our bills. We can only cut staff, cut services and delay maintenance so much until you get to a dangerously low level," Clymer said.
With cutting staff out of the question in the Clymer's eyes -- according to Doolittle, every department of the McCracken County government, aside from the sheriff's department and jail, has shrunk since 2008 -- the court must consider tax increases.
McCracken County, Doolittle explained, has had "historically low" taxes for the last 30 years by levying the 16th lowest property tax rates in the state, being one of the three counties in the state to not have an inventory tax and not tax insurance premiums.
"When you look back to 1991 and come currently to where we are now, our tax levying has actually decreased 14% over that almost 30-year period. People do see their tax bills going up but it's never been because of McCracken County, it's been the other taxing districts that show up on the bill," Doolittle said, explaining that the mental health, county extension service, library and school districts have all increased their taxes over that time.
The fiscal court passed two ordinances early in the meeting, one updating the transient room tax and the other establishing the McCracken County Sports Tourism Commission. Members of the commission's board of directors were appointed later in the meeting, including three members of the hotel and motel association, Mike Burger, Ashley Forcum and Ajay Patel; one member from the restaurant association, Meagan Musselman; one representative of local general commerce businesses, Jim Dudley; and two by direct appointment of the judge-executive, Brian Stewart and Chris Hill.
The next meeting of the McCracken County Fiscal Court is Monday.