2012-11-15 / Front Page

Budget, ‘cliff’ addressed

Chairperson defends conservative approach in light of unknowns

MANISTIQUE – Schoolcraft County may have a balanced budget going into 2013, but, according to one county official, residents should be apprehensive about the actual figures. The year-end status of the 2011-12 budget, as well as the current 2012-13 budget, was discussed during a recent meeting of the Schoolcraft County Board of Commissioners.

According to Dan LaFoille, Audit-Finance Committee chairperson, the county ended the 2011-12 fiscal year with an approximately $800,000 fund balance. This, however, is not the true balance, he added.

“Right off, you have to minus $500,000, and that was the debt that we forgave to the DTR (Delinquent Tax Revolving Fund),” he said. “It does not exist – it’s not going to go away.”

Without this money, LaFoille explained the county is left with around $300,000 – $100,000 of which has been designated to fund the 2012-13 budget.

“At this point, we don’t know if we’re going to need it through the year … so we are basically looking at a $200,000 fund balance right now,” he said. “Good for us that we have that, given all that we’ve been through.”

In addition to unknowns such as the cost of the Schoolcraft County Child Care Fund and medical insurance for county employees, LaFoille also mention the much-hyped “fiscal cliff” facing the nation.

“Before the election, there was not talk of … this supposed federal (fiscal) cliff that we’re about to fall off of,” he said. “We were at various meetings where sequestration was spoken about and that, of course, is falling off the cliff – all the automatic cuts from the federal government that would be because of it.”

A report from the U.S. Congressional Budget Office was released in May describing the fiscal cliff, noting the 2012-13 federal budget deficit would fall significantly due to scheduled reductions in spending and increases in taxes. In recent weeks, news of the cliff has spanned the nation, causing apprehension among municipalities and counties relying, in some part, on federal funding.

According to LaFoille, recent talk of Congress possible avoiding the situation has been helpful, but has only offered slight relief.

“For us, we don’t know how that (the cliff) will affect us, we certainly know that it will affect organizations that we have charge of,” he said. “That’s the primary reason for watching our step here for a while, to make sure we’re going to end up in a good position.”

Some local agency receiving federal funding that may face cuts if Congress fails to compromise are the Commission on Aging, the Community Action Agency, and the Schoolcraft County Airport, LaFoille added.

“I know that’s, perhaps, a conservative outlook, but if this cliff thing happens, it’s going to be significant,” he said. “I don’t think any of us know how that will be handled. Certainly all those federal dollars that go to the state, if the state doesn’t get them, it’s going to filter down to us and we’re not going to get them.”

One step in avoiding a negative financial situation within the county has already been completed, explained LaFoille, noting the $200,000 fund balance. The accumulation of this balance is due to the efforts of county workers in the last year.

“Basically, a lot of that comes from this past budget year; not having to use fund balance or DTR to balance our budget,” he said. “We were able to stay within the guidelines without having to use that money.”

Commissioner Craig Reiter also commented on the county’s ability to maintain a fund balance.

“I think it’s just wise to have that because we don’t know what’s going to happen,” said Reiter. “We’re just starting this year.”

LaFoille explained the county would have to remain “cautious”, but that they may be in a better position than others to deal with financial situations as they progress.

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