May 26, 2006 Moving Forward with Wrong Numbers (TPTS Part III)

The Perfect Tax Storm (TPTS Part III)

The budget process continues in Hamblen County, and wrong numbers are everywhere. It's a lot like a shell game, and it looks like the ones in charge of the shell game aren't even sure what's going on. Here's a number, now it's gone!

In the first two meetings, we had two errors totalling $1.2 million+.

1st: Expenditures of $1,000,000 were somehow "left off" our debt payments. Kind of like preparing a family budget and "leaving off" the mortgage or car payment--not a good idea.

2nd: Revenues of $200,000+ were listed in the highway budget, but that state aid money will not be received by the county according to Road Superintendent Barry Poole. Poole knew the facts and figures on the highway expenditures, but he said he had not been consulted during preparation of the highway revenues and so he was surprised to see that state aid money had been included. Kind of like preparing a family budget and counting on income that won't be received--not a good idea.

See my posts of May 23 and May 24 for more detail on these two errors.

Then yesterday, it was announced at the beginning of the meeting that insurance expenditures.shown in the Hamblen County budget documents are wrong for just about every department---total of this error is about $100,000+.

Unlike the previous errors, the good thing about this error is that when the corrections are made, our planned 06-07 expenditures will be reduced by about $100,000. That reduction in expenses will reduce the amount of the projected 06-07 general fund deficit.

How did this error happen? The total cost of each employee's insurance premium (the portion paid by the county and the portion paid by the employee) was shown as a county expense. However, only the portion of the premium that is actually paid by the county is really a county expense.

There were numerous other errors discovered yesterday--some were corrected yesterday but others will require changes to budgets that have already been "approved" in prior meetings.

I stated at the start of the budget process that we needed to wait for better numbers and until after we had looked at all budgets before we started "approving" budgets.

With that in mind, I have been voting "no" on almost all budgets with an occasional "yes" on a very small budget or on a few budgets where expenditures are less than last year.

With the insurance error that affects almost all budgets and then other errors that were discovered midway through yesterday's budget review, it became clear that a simple "no" vote on all budgets is best.

Why? Because almost every budget will have at least one correction to be made to insurance costs and many of those same budgets have additional errors that will have to be corrected.

At this point, we just need to take in information, ask questions, and wait for the many adjustments to be made before even considering "approval" of budgets.