Officials introduced Lancaster County’s proposed 2024 budget this week, the 11th in a row that does not raise property tax rates.
It does, however, use about $3.4 million from its American Rescue Plan Act allocation — a one-time funding source — to bring revenues in line with expenses. That’s a stopgap measure that could lead to trouble down the road, Commissioner John Trescot warned.
“We’re basically running a deficit,” he told Budget Services Director Patrick Mulligan at the commissioners’ Tuesday work session.
“You could look at it that way,” or you could say that the county is simply making use of balances that it has available, Mulligan replied.
If the county’s cash flow position were to stay negative going forward, that would raise concerns for credit rating agencies and could impact the county’s creditworthiness, Trescot said.
What’s next?
To view the proposed 2024 Lancaster County budget and related documents, visit the county’s Budget & Financial Information web page.
Officials have scheduled an evening meeting to discuss the budget at 6 p.m. Tuesday, Dec. 12, in Rooms 102-104 at the County Government Center, 150 N. Queen St.
The budget is scheduled for adoption at the county commissioners’ meeting at 9:15 a.m. Wednesday, Dec. 20. It takes place at the County Government Center, Room 701.
The bottom line
The proposed budget calls for $182.6 million in general fund expenditures and forecasts $186.7 million in revenue, resulting in a nominal end-of-year surplus of $100,000, which would nudge the general fund reserves up to about $62 million.
Property tax rates would remain unchanged at 2.911 mills, with 1 mill equaling $1 per $1,000 of assessed property value. Property tax revenues, including collection of delinquent payments, are forecast to grow by $1.8 million to $129.1 million.
Helping the revenue figures is a projected $9.5 million in interest earnings. That includes about $2 million carried over from 2023. The county formed an Investment Board when it became a class 2A entity in 2022 and has been able to earn significant returns from unspent ARPA funds and other reserves.
Pay and benefits account for the largest share of expenses, $100.7 million, supporting 1,284 county positions. That figure reflects increases in the county’s union contracts plus a 3.5% raise for non-union employees, effective Jan. 1, Mulligan said.
Many non-union employees will also be receiving a 2.5% increase on the same date, the last step in a three-part phase-in of wage hikes implemented last year as a result of the county’s compensation study.
Trescot said he would advocate a 4% raise on April 1, rather than the 3.5% raise Jan. 1. That would result in a somewhat larger overall boost: About $220,000 over the course of 2024. However, his colleagues, commissioners Josh Parsons and Ray D’Agostino, said they were fine with the budget as proposed.
While the county has transferred ARPA funds to its reserves in previous years, 2024 would be the first time it uses the federal money to cover an operating deficit. That contrasts with Lancaster city, which has used $13.66 million of its $39.5 million ARPA allocation for that purpose so far, and is planning to use another $6 million in 2024.
Thereafter, with ARPA gone, the city will once again face an acute structural deficit, Mayor Danene Sorace says, unable to maintain adequate services without excessive property tax increases. The issue is the main reason the city empaneled a Home Rule Study Commission: A home rule charter, if enacted, would give the city leeway to rely more on other taxes, particularly the earned income tax.
Funded agencies
The county budget includes grants totaling $4.3 million to 11 third-party agencies, an increase of $146,323 over 2023. Parsons said the annual increases are getting out of hand and although he’ll go along with them this year, in future the county needs to start holding the line or paring back.
That led to a discussion of whether to provide an increase to the member libraries in the county library system. In an October budget hearing, library system Executive Director had requested a $145,225 increase, or 65%, for member libraries to help them increase their minimum wage for all staff to $15 an hour.
The county’s budget team proposed providing half the increase, $72,513, potentially structured as a matching grant to incentivize the libraries’ home municipalities to provide the other half. Parsons and D’Agostino, however, opposed that idea, which leaves the proposed funding for the libraries unchanged at $225,000.
A library serves its local community, so that community should be responsible for funding, rather than seeking resources from a higher level of government, D’Agostino said.
“It should be based upon the community saying, ‘This is something we want and we value,'” he said.
Other funds
Besides the general fund, the county has five internal agencies funded primarily by pass-through grants: Behavioral Health/Developmental Services, Children & Youth, Domestic Relation, Drug & Alcohol and the Office of Aging. Together, they have 571 staff positions.
For 2024, the budget forecasts just over $122 million in revenue for them, and $123.5 million in expenses. The difference would be covered by reserves, reducing their reserve balance from $17 million to $15.6 million.
