Lumpkin says county in danger of running out of money
Published 4:42 pm Tuesday, June 19, 2012
Pearl River County’s fiscal crisis continued to percolate on Monday. Supervisors are taking fiscal steps now that no one has ever seen them take before. The crisis seems unprecedented.
Pearl River County Administrator Adrain Lumpkin, Jr., told supervisors that the county, if it stays on the current spending trajectory, will run out of money to pay the bills soon.
He said he could not say exactly when that will happen, but he added that the county’s cash balance has been on a downward trend for two years, and if not reversed, will carry the county into its worse fiscal crisis ever, with the county being unable to pay its bills.
Highlighting the seriousness of the crisis was the fact that Sheriff David Allison asked the board repeatedly on Monday to rescind a freeze on his department’s purchase orders, and no supervisor would make a motion to do so.
Allison, after leaving the board meeting, told the Picayune Item that the freeze on POs for his department was effectively shutting down his department. Late Monday, a spokesperson for the board said that no action has been taken so far on Allison’s request. Allison argued that his department was over budget by only $98.
Allison outlined before the board essential services and products that had to be paid for on a daily basis, including fuel. Allison said supervisors told him they would discuss it further Monday evening and decide what to do. “We can’t cut any further,” said Allison. “We are putting people’s lives in danger.”
In another matter showing the unprecedented state of affairs, supervisor Anthony Hales made a motion that all nonessential expenditures not required by state law or an outstanding contract be cut. His motion died for lack of a second. Supervisors Joyce Culpepper and Dennis Dedeaux said they wanted to see what departments or entities would be affected before taking that step.
Lumpkin told the board of supervisors that the current cash balance is $500,000 below last year’s at this time, and is on a decidedly downward trend, which must be reversed or stabilized or the county will run out of money. Lumpkin has served as county administrator for 10 years, and tax assessor-collector Gary Beech, who was at the meeting, served as administrator for 12 years before he was elected to the assessor-collector’s post, and both told the board that the current fiscal situation is the worst they have ever seen.
Supervisors at their June 11 meeting passed resolutions freezing hiring, issuance of POs for departments over budget and requiring department heads to tell supervisors how they planned to rein in spending.
Monday’s supervisors meeting stretched into five hours, most of it taken up with discussion of county financial problems. Besides Allison, Chancery Clerk David Earl Johnson, Circuit Court Clerk Vickie Hariel, Justice Court Clerk Debbie Amacker, Chancery Court Deputy Clerk Marie Burge and Beech addressed the board concerning the budget crisis.
In one presentation by a non-official, Joseph Dodd of Picayune, a Pearl River Community College student, blasted a one-percent countywide sales tax proposal by Hales and said it would be a hardship on the county’s low-income families because in Mississippi the sales tax is applied to food, unlike in Louisiana where it’s not. Dodd said he was speaking only as a private citizen concerned with the issue and did not represent any group or party.
Dodd called for the county to cut its budget by 20 percent, and for supervisors to set an example by cutting their own budget by 20 percent.
Hales replied to Dodd that stringent cuts are only one proposed solution. He said that drastic cuts would cripple services that county residents are used to and want.
“We can shut down Chimney Square in Picayune and save a million dollars a year,” said Hales, “but will the citizens tolerate such a drastic move? Putting the building down there was done to save county customers a trip to Poplarville to do county business.”
Supervisors board president J. Patrick Lee asked department heads if they could cut further.
— Allison told the board he couldn’t and that he had already absorbed $1.8 million in cuts and burglaries in the county were on the rise, with 15 last week.
— Hariel said, although she felt her budget was not out of balance when her reimbursements to the county are taken into consideration, that she could possibly eliminate insurance for two employees and one full-time salary.
— Johnson told the board he would cut in every way possible, but some services are mandated by law. He said that mailing 2,500 certified letters to “landholders and lienors for the 2009 maturing taxes,” will cost his office $14,500, an expense that can’t be avoided.
— Beech told supervisors that last year he absorbed a 10 percent cut, and could not absorb another one without drastic cuts in services. “There’s a limit you reach, and then it cuts into services and sometimes employees,” said Beech.
Dodd told supervisors that he planned to hold a town hall meeting at the Link in Picayune to discuss the county fiscal crisis and possible solutions to it, on Thursday, July 9, at 7 p.m.
Dodd also told supervisors that State Sen. Tony Smith “assured me on Friday night that this (the one-cent sales tax proposal) will die in the committee on which he sits.”
Supervisor Sandy Kane Smith said Smith had told him he did not favor the one-cent countywide sales tax proposal by Hales. On Monday, Allison and Johnson joined Picayune Mayor Ed Pinero, Jr., and said they favored Hales’ one-cent proposal.
Said Dodd, “This board knows that this sales tax is an effort in futility. And yet it seems to be the only solution they are pursuing. So in a few months, when this so-called solution dies a quick and deserved death in a Jackson meeting room, what then for our county. What then for this budget crisis? Where are we? We’re six months behind on a practical solution.”
Hales told Dodd that he was pushing the one-cent effort for “long-range” reasons. “It won’t help us one bit right now,” he told Dodd. “I am doing this for the future. If we had tackled this issue years ago, we wouldn’t be in this situation right now.” Hales said that cities get a rebate on the sales taxes collected in the cities and up to one-half of their budgets are supported by the sales tax rebate.
He said that counties get nothing from the sales tax and are forced to rely only on the property tax, and that property owners are “tapped out” on land and home taxes. He said only about 66 percent of residents pay taxes on residential property.
Beech told the board on Monday, in a formal letter, that using the property tax to raise revenue was “a dead-end revenue stream unless you get a nuclear power plant, a refinery, a casino or a Nissan plant,” something that will generate large sums of money. Said Beech, “Property tax is not associated with any income and it’s a penalty for investing in your home, and it’s the most painful because it is paid all at one time at a bad time of the year and no government with any authority would use property tax to fund itself.” He said the state generates its money using the sales tax and income tax.
Pressed by Lumpkin on what property taxes might generate this year, Beech said they would be down because of reduced property values. Lumpkin said that exacerbating the fiscal crisis is that the county is moving into a financially lean period of the year before property tax payments come in the first of the year. The county has to adopt a new budget by Oct. 1. Its fiscal year runs Oct. 1 through Sept. 30.
Johnson told the board that his office was open to the public and said anyone wanting to know what he spends and why, should come to his office and “I will show them.” Said Johnson, “I love this job because I can help people, and I will explain what I do and what I spend to anyone who comes through my front door.”