Caution Is Best Path With Budgets During Time Of Economic Uncertainty
A healthy fund balance and growth of tax base are masking Chautauqua County’s healthy appetite for spending.
The 2023 county budget proposed by County Executive PJ Wendel decreases the tax rate, a feat possible by an 8.1% increase in the county’s taxable assessment, while increasing both spending and staffing.
Wendel’s budget is balanced. But a survey of the World Economic Forum’s Chief Economists Outlook says the outlook for the global economy has “darkened” and the world is a point of “significant economic danger.” Expectations for economic growth have been scaled back across the world, with 64% of respondents considering a global recession to be at least “somewhat likely”, the report says.
Legislators should keep that in mind as they review the 2023 county budget. If a recession is likely, does it make sense to spend $4.5 million from the county’s fund balance, including $3.6 million for capital projects and $600,000 for one-time CSEA bonuses? That decision may come back to bite the county if the economy tanks in the next 12 months.
Spending that much from the fund balance is notable because the executive’s budget proposal includes a 6.9% increase in revenues, including a $5 million increase in sales tax revenue. While that is in line with pandemic-related growth trends, no one can accurately project right now what the next year holds.
And, at a time when many in the private sector are feeling relative unease with their economic future, the county is proposing 34.25 new positions that include public defenders, school resource officers, emergency medical technicians. cold case investigations and and economic development.
Many experts are wary about what the next year holds economically. County officials should keep that in mind.