County Administrator Patrick Thompson, and Operations Manager Ken Witt presented their strategy for developing St. Croix County’s 2018 operating budget at the Administration Committee meeting on May 17.  The final budget will be prepared by the Administration, and presented to the Board for approval later this year.  For Fiscal Year 2017, the current budget is fairly well balanced, with projected revenues equalling projected expenses, both totaling about $85 Million.

According to Witt, the currently established automatic annual wage increase for County employees, combined with the projected increase in health care costs will create an approximately $500,000.00 deficit in the 2018 budget.  It is anticipated that additional revenues generated in 2018 will not keep pace with rising costs.  Left un-checked, the annual deficit gap would continue to widen each year, reaching an estimated $1.5 Million annual operating loss for the County by 2020.  He noted that the 2018 deficit can be accommodated by using cash from the existing General Fund balance, but that this practice was not sustainable beyond 2018.

The Administration’s proposed strategy to deal with the increasing mis-match between revenue and expenses is to place a freeze on new hiring, hold all departments to 2017 spending levels, and limit County employee pay increases to every other year, instead of every year, eliminating any increases in 2019.  This would bring expenses in line with revenues over the longer term.

Upon hearing the stark budget outlook, the Board members on the committee seemed to be somewhat stunned at the news.  Immediately after hearing about the proposal to limit employee increases to every other year, Supervisor Burke inquired: “Those increases, with respect to (the) step, and so forth… would (still) be considered whether it’s an odd or even year, or am I misunderstanding that?”  Witt’s frank response was “That was the plan, that they would happen every year, but I’m telling you we’re not going to have enough revenue to implement that original plan.”

Supervisor Sjoberg asked: “What do they  (State Government in Madison) suggest we do… if employees don’t get a wage increase at all, and health insurance does go up by eight percent?”  Administrator Thompson responded: “Their solution is to stay within the levy limits, and if you don’t, they’ll reduce it from our shared revenue.”

In a later business item following the discussion of the strategy the Administration will use to balance the extremely tight operating budget to mitigate longer term deficits, Supervisor Sjoberg also introduced a proposed ordinance that would seek to force all County contractors to pay even entry level job workers at least a “living wage” which would undoubtedly further increase expenses for County contracts.

View the full Administration Committee meeting video on the County’s web site.