The draft budget delivered to county commissioners Monday contains no tax increases, no new capital spending and no pay raises for county employees.
The county’s soon-to-be former manager warned commissioners that the current fiscal track for Columbus is not sustainable.
The new year’s proposed budget of $105 million is four percent less than the current budget. The draft pulls $2,379,776 from fund balance, down from the $3,641,847 in the current budget.
Departing County Manager Eddie Madden’s last day is Friday. He announced his retirement shortly after the March primaries, but later accepted the town manager’s post in Elizabethtown, where he previously served.
Madden warned the board that the current financial path is unsustainable. He delivered an informal budget message to the board with his farewell comments Monday.
“In many ways,” Madden said, “I am confident the county is better off today than it was five years ago.” He noted improvements to county offices and facilities, the airport, the historic courthouse, and the north campus facilities.
“Many jobs have been created during my tenure, including 300 jobs at Provalus,” a new technical support firm across Columbus Street from the county offices.”
“Public safety is much improved due to the new 911 center and EOC. We have a better qualified staff in place with a pipeline of new talent in our system. Finally, development is occurring due to investments by the county in water and sewer.
“On the other hand, the county has not improved its bottom line in the same time period. Due to rising costs and reduced revenues, the board has had to utilize fund balance year after year to maintain a balanced budget and meet expectations because of its priority of keep taxes low.”
“Some very difficult decisions will have to be made between now and June 30,” Madden wrote in his final comments to the board.
According to state law, the commissioners have until June 30 to approve a new budget or a continuing resolution. The board has held fast on the 80.5 cents per $100 valuation property tax rate for 20 years, using increased tax revenues and fund balance to fill out the annual budget.
Madden pointed out that property taxes have remained unchanged “for years” except during property revaluation cycles, which typically increase the amount being paid to the county due to new taxable property. Property revaluation occurs every decade, and Columbus will not see another one until 2029.
Commissioners directed county staff to assemble the fiscal 26-27 budget with no tax increase, which Madden said had been accomplished.
The county collects around $30 million a year in taxes, with revenues remaining basically flat, Madden said. Columbus took a major hit when it lost $2 million in tax revenues due to a release for International Paper when part of the plant was shuttered.
“The board has said no tax increase, so we’ve delivered a budget without a tax increase.” He emphasized several times that the county is heading into shaky financial territory and will either need to slash operating costs and services or raise taxes.
“You’ve either got to raise revenue or cut expenses,” he said.
The Local Government Commission, the county’s audit firm and the state auditor are monitoring the county’s operations closely, and all three have told officials that the county needs to reduce spending and stop depleting the fund balance. The fund balance operates as a savings account for emergencies such as natural disasters or major unexpected capital projects.
Madden said the county “is not broke,” but cash reserves and investments are on par with 2021 data, while operating costs have drastically increased for a variety of reasons. As an example, Madden pointed out multiple new unfunded mandates from the state as well as new laws with “unintended consequences” that have increased costs for the sheriff’s office and Social Services.
“Other revenues we typically receive from the state and federal government have also been greatly reduced,” he said. “In DSS alone, their budgeted revenues are down $1.4 million and additional revenue reductions are expected over the next two budget years due to Medicaid reform at the federal and state level.”
Meanwhile, he explained, costs drastically increased.
“Expenses, on the other hand, have gone up considerably year over year. Utilities, property and liability premiums, health insurance costs to include surcharges issued by the state, retirement contributions, vehicles including repairs and maintenance, as well as food and medical expenses for inmates have increased exponentially.”
The budget for the sheriff increased from $10 million in 2021 to more than $17 million due to rising costs “that are outside the control of the sheriff’s office,” he explained. This year’s sheriff’s budget request for FY 27 is more than $21 million.
“At the same time, revenues for the federal inmate housing have reduced more than $600,000 due to changes to state law,” he said. The sheriff’s budget now makes up two-thirds of the property tax revenue for the county, Madden explained.
“The remaining 25 departments must operate on the remainder.”
The county put off a cost of living adjustment for employees in 2024, and instituted a reduction in force by leaving some positions unfilled.
“In 2026, we have avoided another round of layoffs but salaries have had to remain unchanged due to budget constraints,” he said.
The current proposal also includes no increase for the school systems or Southeastern Community College, for the first time since 2021.
A one percent cost of living adjustment had been proposed for county employees, but that was cut from the final draft as officials worked to carve out a new financial plan. No layoffs are included in the 26-27 budget, Madden said, but salaries will remain frozen.
“That’s not comfortable either because we know our employees’ costs have risen and we’re not able to meet inflation putting further strain on them.”
The proposal also includes no capital spending, which was removed to meet the state’s balanced budget mandate. Madden said the move was impractical and would lead to budget amendments.
“So when an air conditioner unit goes out on this building or a lawn mower breaks down,” he said, “you’ll be approached sometime in the budget year for those funds to be appropriated outside of your budget.”
Madden said departmental spending has already been reduced, while maintaining current service levels. Major reductions are not laid out in the budget proposal.
“You’ve either got to make further cuts in other departments … is not an option at this point, or increase revenue. We have reduced budgets so much that you are cutting into basic services now.”
Madden closed his remarks by warning the board about future impacts of the current budget as proposed.
“While I am leaving at an inopportune time, and arguably at a time when the county finds itself in a less than ideal situation,” he said, “I have come to realize that I can only do what I am authorized to do. The board makes the final decision on its budget and budget amendments throughout the year. It sets the annual tax rate that we base the county budget on. It decides when it is necessary to appropriate fund balance and what its priorities are.
“My job has been and continues to be to support the board on its decisions. I do not envy your positions especially related to the upcoming budget. Some very difficult decisions will have to be made between now and June 30. I recommend to the board that you closely study and evaluate the proposed budget before you take action on it. Any action you take has consequences because unlike years past you do not have the opportunity to reduce your fund balance to cover extra spending or revenues losses.
A public hearing is scheduled for June 1 at 6:30 p.m. to receive comments on the budget. The full document can be accessed here: https://drive.google.com/drive/folders/1ZQ1kwHzCZZOAAgLiFEA5PXSPQ5cbxpsP
