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A recent Observer/Post-Journal editorial asked if the Chautauqua County 2027 budget is realistic. I think a better question is: "Is the 2027 budget prudent?" The answer to that question is "No."
I was the County Budget Director from 2017-2023. I worked for three county executives, including Executive Wendel. The executives and the Finance Department agreed the budget should be structurally balanced, the tax levy should not exceed the levy limit, and general fund balance should only be used for unusual or unexpected expenditures.
In this year's tentative budget, two of those past practices are not followed. The tax levy is unchanged, so it is under the levy limit. However, the budget is not structurally balanced, and a large portion of fund balance is used to cover everyday operating expenditures. A structurally balanced budget is one in which regular, or recurring, expenses are paid for with regular, or recurring, revenues. This year, regular operating expenses are $7.5M more than regular operating revenues (shown in the budget by "Use of General Fund Balance, Miscellaneous"). In total, $11.8M in undesignated, unreserved fund balance is needed to balance the budget. Remember, fund balance is not refreshed each year. The fund balance is the county's savings account; it is the amount of money saved over time when revenues exceed expenses. It is replenished only if annual revenues exceed annual expenses.
The fund balance has been called a slush fund, and some people think it is too high. The fund balance is not a slush fund. It cannot be used at the county executive's discretion; use of fund balance must be approved by the legislature. The fund balance is not too high. General fund balance is projected to be $31.7M at the end of 2026. That's a lot of money, but it is only 10% of this year's budget. If your household budget is $75,000 per year, and your savings account is 10% of your budget, your "fund balance" would be $7,500. Would you say your savings account is too big? Would you feel financially secure with only enough money to cover your expenses for one-tenth of your year?
The 2027 Tentative Budget proposes to reduce the general unassigned fund balance by more than a third. At the end of 2027, it is expected to be $19.6M. That will be about 6% of the annual budget, or enough money to finance 22 days of operations. If the family with an annual budget of $75,000 followed the same path, its savings account would shrink from $7,500 to $4,500.
No one wants to pay more taxes, but we want services to be maintained, and we should want our county to be financially secure. Consequently, the 2027 tax levy should be increased to the levy limit. Many legislative seats are being challenged this year, and "No increase in the tax levy" is a popular message. If the tentative budget is passed as is, the message next year will be different because there will not be enough fund balance to save the day. The financial stability of the county was built over several years of careful planning. It would be imprudent and short-sighted to undo that progress in one year.
Kathleen Dennison is the former Chautauqua County budget director and is a Pomfret Town Board member. She is a Fredonia resident.