October 23, 2014

Elyria
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Report: County faces huge debt

ELYRIA — Lorain County’s financial future is bleak, according to an independent report presented to the county commissioners Thursday.

The report, prepared by the Public Service Institute at Lorain County Community College as county voters get ready to vote on whether to allow a sales tax increase, said that the county could have a budget shortfall of about $8.6 million next year.

The shortfall could grow to $14.6 million by 2010 and be as high at $48.3 million by 2020, according to the report.

“It was more doom and gloom than what I was hoping for,” Commissioner Lori Kokoski said. “When you project it out to 2010 and 2020, we’re really in trouble.”

The commissioners hired the institute to conduct the $11,000 study to help justify a 0.25 percent sales tax increase to be placed before voters in November. The tax hike would bring in about $7.4 million annually that commissioners say is necessary to help offset the loss of $3.5 million in state funding, the growing cost of the county’s justice system and other rising expenses.

The commissioners enacted the tax increase in March, but a petition drive gathered enough signatures to force the issue onto the ballot. Commissioner Betty Blair said the study validates what the commissioners have been saying.

“I believe the study shows that we are, in fact, in some trouble and not just making it up,” Blair said.

But county Auditor Mark Stewart said Thursday that he still believes the county doesn’t need the sales tax increase yet, pointing to the fact that the county has been able to offset the loss of the state funding this year.

Kokoski, Blair and fellow Commissioner Ted Kalo said they aren’t surprised the county will survive the year in decent financial shape.

It’s the future they’re concerned about.

“We’re getting by this year,” Kokoski said. “I’m worried about the next couple of years.”

Stewart said it’s too soon to tell what the county’s financial condition will be next year, but right now it’s not bad enough to justify the tax hike.

“I’m not going to be voting for the sales tax,” Stewart said. “Next year might be a different tune, I’m not sure.”

Blair said the county has been able to do some things this year to raise money, but won’t be as lucky next year.

“You can only patch for so long,” she said. “There’s three ways we can deal with this — increase income, through cuts that aren’t just temporary or the third is through borrowing and you can’t borrow for operational expenses.”

Kalo said the county will probably have a carryover of about $10.5 million this year, down about $4.5 million from what the county carried into 2007 from last year.

County officials argue that the county needs a carryover of at least $9 million to operate at the beginning of the year and maintain a decent bond rating. If the carryover is spent maintaining county services, it isn’t available for that.

“County government has to prepare for the future,” Kalo said.

During her presentation Thursday, Public Service Institute Director Shara Davis said that at the rate the county’s criminal justice system is growing — it currently eats up about 70 percent of the county’s general fund budget — it could consume virtually everything the county takes in within a few years.

The county’s expenditures on the justice system — not including maintenance costs, capital improvements and insurance and pensions — has grown from nearly $17.9 million in 2000 to about $29.1 million in 2006. By 2010, Davis estimated that number could grow to nearly $38 million and $57 million by 2020.

The commissioners all said that if they have to cut to accommodate the justice system or other mandated services, it will be those services that aren’t required — for example, Lorain County Transit and the Soil and Water Conservation District — that will be the first to feel the budget ax.

“If the tax doesn’t pass, I’m going to vote ‘no’ on everything (that isn’t mandated),” Kokoski said.

After Davis laid out the findings for the commissioner, they went back to business — voting to restore about $112,000 to county Clerk of Courts Ron Nabakowski and $78,000 to county Prosecutor Dennis Will, both of whom saw their office budgets cut earlier this year.

Next year, the commissioners warned, they might not be able to be as generous.

Contact Brad Dicken at 329-7147 or bdicken@chroniclet.com.