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Tom Byers, Elkhart County administrator, discusses potential impacts to the 2015 budget, like a wage adjustment for county employees and increasing the rainy day fund. The Elkhart County Council and Board of Commissioners held their annual summit Friday, May 9, 2014. (Sarah Duis/The Elkhart Truth)

Pauline Graff, Elkhart County auditor (right), lays out the 2015 county budget estimate at the annual local government summit Friday, May 9, 2014. It's unclear what the final shortfall will be, but it's expected to be in the multimillion dollar range. (Sarah Duis/The Elkhart Truth)
Local government leaders anticipate further budget deficits in 2015

Posted on May 9, 2014 at 5:55 p.m.

Elkhart County is anticipating another multimillion dollar budget deficit next year.

During the Elkhart County Council and Board of Commissioners' annual summit Friday, May 9, county auditor Pauline Graff estimated up to a $7.6 million shortfall in the 2015 county budget. Official numbers won't be available until later this year.

Deficits have become the new normal in local governments since the state of Indiana implemented personal property tax caps in 2008. The total deficit for 2015 is partially dependent on the outcome of the county commissioners' fiscal policy goals for 2015.

Those goals include:

  • Increasing the balance of the general fund, projected to total $5 million next year. Before 2008, the fund was usually between $11 million and $13 million.

  • Fully funding the general fund without the use of Economic Development Income Tax (EDIT) or landfill revenues. EDIT funds are typically used to fund construction projects or to match federally funded projects.

  • Increasing the County Adjusted Gross Income Tax (CAGIT) to build a new juvenile detention center. Tom Byers, county administrator, said utilities and maintenance issues at the current center are causing the county “major headaches.”

  • Starting to rebuild the rainy day fund. The current balance is $277,804.

  • Providing a market adjustment to wages for county employees. Areas such as the Elkhart County Sheriff’s Department are facing high turnover rates due to stagnant wages. A 3 percent wage adjustment for county workers would have a $555,790 impact on the general fund and a $355,355 impact on other funds.

During the summit, Todd Samuelson of Umbaugh Associates laid out several local option income tax models the county could implement to help offset deficits caused by tax caps.

Mike Yoder, county commissioner, said in April that the county's income tax revenue is almost fully recovered, but property tax revenues have gone from $41 million to $23 million.

Throughout the summit, members of the county council, board of commissioners and other local government leaders weighed in on the potential effects of a tax increase. Most agreed that something needs to be done as it becomes increasingly difficult to cut budgets without eliminating services that residents rely on.

Alan Kauffman, mayor of Goshen, said he wished state legislators were present for the meeting to hear the discussion and realize that cutting budgets and operating like a private business are no longer enough to keep things working.

"In private business you always have the option of going out of business if things aren't very good. We don't have the option of going out of business," Kauffman said.

Tom Byers, county administrator, said the goal of the summit was to get some numbers on the table and recognize some of the issues that are on the horizon, "because we’re probably going to start seeing budget forms sooner than we want.”

The county council will have until the fall to decide whether or not to implement a local option income tax increase.