Lancaster County officials Tuesday introduced a preliminary 2024 budget that manages to tackle rising costs without raising property taxes, but some of the methods used to balance the budget could lead to tougher fiscal choices in the future.
Under the proposed plan, the county would be able to cover its projected $182.6 million general fund budget for next year with the help of about $3.4 million in federal recovery money from the 2021 American Rescue Plan Act.
County budget director Pat Mulligan reviewed that plan with commissioners at their work session Tuesday.
“We’re basically running a deficit for this year,” outgoing Commissioner John Trescot said. “That is different than in years past.”
Trescot, an appointee who will leave the board at the end of the year, noted that spending more money than what is raised through taxes, fines and fees in a given year could be an unwelcome change for bond ratings agencies.
Commissioner Ray D’Agostino said he supports the budget the way it is. “It’s been a tough situation with inflation,” he said.
Commissioner Josh Parsons did not weigh in on the budget as a whole during the Tuesday work session.
In recent years, the board’s frugal approach to its finances has helped to twice raise the county’s bond rating with Moody’s Investor Services. Lancaster County’s debt is now rated Aa2, Moody’s third-highest rating.
Local governments across the country have used ARPA funds to close budget gaps in recent years. That includes Lancaster city, where Mayor Danene Sorace has warned residents that the city likely will face budget deficits in the future once the money runs out.
The county’s draft budget for next year also carries over an additional $2 million in interest earnings from 2023 that has gone unspent, Trescot said.
Officials have stowed away a share of the county’s $106 million ARPA allocation in interest-bearing accounts while it remains unspent.
To date, the county has reported allocating about $77 million of its ARPA funds, leaving about $29 million remaining. The $77 million figure does not include the $3.4 million assumed in the 2024 budget.
The budget plan also benefits from the county’s strong financial position in recent years. After refinancing several outstanding bonds and avoiding new bond issues, the county’s debt payments are set to decrease in coming years.
In 2024, the county is due to pay $19.1 million in debt service, $2 million less than the current year.
At the Tuesday meeting, Trescot proposed a change to the county’s incremental schedule of pay raises for nonunion employees. Instead of awarding eligible workers a 3.5% raise beginning in January, Trescot said he favored 4% raises that would take effect in April.
The maneuver would have added $225,000 to the county’s spending plan next year, something commissioners Josh Parsons and D’Agostino did not support.
“The new salary administration plan is only a year old, and we’ve got to let that play out,” D’Agostino said.
The preliminary budget is not final. On Wednesday, commissioners will formally vote to make a summary of the fiscal plan available for public viewing.
A special evening commissioners’ meeting, slated for 6 p.m. Dec. 12 at the Lancaster County Government Center in conference room 102/104, will include an in-depth budget presentation from county officials. The meeting is open to the public.
Read More: Early Lancaster County 2024 budget plan balanced with help from ARPA funds |