North Jefferson News, Gardendale, AL


June 17, 2011

Which came first, the money or the debt?

Business AdVISE

NORTH JEFFERSON — Is it the chicken or the egg? Is it a symptom or the problem? Governor Dr. Bentley will appreciate the value echoed in the difference between treating a symptom and missing the care of the underlying problem. Think about this for a moment in the context of the Limited Home Rule Vote and how it plays out here in Jefferson County.  Is the problem that Jefferson County, according to Leadership, does not have enough money and must lay off workers if they cannot raise taxes?  Or is that just a symptom of an underlying deeper problem?  The money is perhaps available, but the real problem is making the hard choices of keeping employees, letting employees go, keeping projects, or letting projects go.

Back in March, The Alabama Supreme Court threw out the county's previous occupational tax, which generated $66 million in revenue last year. Losing the tax led the commission to cut more than $30 million in spending and close the county's satellite courthouses.  (Now is a time to ask you if that was a huge inconvenience, a simple yes or no will do.)  By state law, we must have a balanced budget.  In order to balance the budget now, and without these additional funds from taxation, there are now some hard decisions to be made. Jobs will be reduced. Services will be lost. A three-part plan was developed to address the loss of revenue and it looks like this:  

• Aggressively cutting the county’s budget by an additional $25-30 million  

• Implementing replacement revenue of $45-50 million

• Unearmarking at least the one-cent general county sales tax.

Number one was taken care of a few months ago.  Number two which would have replaced the $50 million that is needed died on the vine with the failure of the Limited Home Rule, and number three is still in play and very viable.  

Our State Senator Beason said that instead of talking about raising taxes, lawmakers should have passed laws to unearmark Jefferson County revenues.  This would allow the Jefferson County Commission to spend its revenues where the commissioners felt the needs were greatest. Several unearmarking bills, including one by Beason, died in the regular session.

“Unearmarking is the answer to the county's problems,” Beason said. “There are millions of dollars put in other places that could be moved to use to pay for the essential functions of county government. I think it's crazy to even talk about raising taxes when unearmarking would solve the problem” In the mean time, Beason said the county has a $90 million reserve that could be tapped by commissioners until lawmakers meet again to consider unearmarking bills. According to Beason, eliminating earmarks will give county officials the authority to use money from one cent of the county's two cents in sales taxes to meet financial needs without raising taxes. “I think we should give them some flexibility and freedom to reprioritize their spending and do what they need to do,” Beason said.

“I think the county, and the state, really, to a large extent, are hamstrung at what it can do to rearrange its budget when so much of it is earmarked,” said Beason. Jefferson County levies a two percent sales tax, with each penny tax raising about $86.4 million in 2010. One percentage point is dedicated to retiring $1 billion in bonds for school construction, while the other – the portion Beason's bill addresses – is used in several ways.

More than 65 percent of that penny sales tax is earmarked for areas other than the general fund, which is used to pay for law enforcement, family and probate courts, roads, inspections, zoning and other functions.

With the alternative choice being whether there will be a layoff of workers   or a reduction of services the question remains, is the money there, or do we just need to shift it around.   “There comes a time when government has to live within its means. We have the same problem on a state level, which we are addressing, and the same problem on a federal level- completely out of control spending and debt. Eventually you have to put the brakes on that,” Beason said of his reason to block the Limited Home Rule bill from a vote. The proposed reductions include up to 282 employees in the roads department; 156 in the general services department; 148 in the sheriff's office and 61 in the revenue, finance and budget management departments, according to county figures.     

Beason says lay-offs and cuts don't have to happen because of 90 million dollars in the county's reserves.  

If government efficiencies were like those in private industry, there should be a shift in personnel over time as roles change, the skill needs adapt and change, and progress moves us forward. Do you have the same number of employees doing the exact same thing that they did 10 to 15 years ago? Have they learned new skills that have made them better, faster or smarter and therefore better contributors? Have you let any employees go? Most likely the answers to each of these questions is yes, and government entities, if they are progressing and creating value, are and should be no different.  


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