Though lean years are ahead, 2021 could bring a budget increase for Johnson County, and give the county council room to consider permanent raises or one-time stipends for its employees.
The county’s proposed budget is $38.8 million — a 1.8% increase from this year — with about $40 million in revenue expected, according to a draft of the budget presented this week. Financial experts are predicting 2021 may be the last year for several that the county’s revenue exceeds its expenses.
At upcoming budget hearings in October, the county council will discuss spending $483,327 to close pay gaps between county employees who do similar jobs, and up to $193,500 to give one-time stipends to employees and elected officials who meet or exceed the average pay for their jobs. If the council chooses not to award stipends to elected officials, it would be $184,500, according to county documents.
Council members did not vote, but voiced support at this week’s county council meeting for the salary recommendations put forth by a salary committee.
The committee, comprised of county council members James Ison and Pete Ketchum, and Commissioner Ron West, compiled the recommendations based on results from a salary study, commissioned last year by the Johnson County Board of Commissioners and presented in June.
The study, by Muncie-based Waggoner, Irwin, Scheele Management Consultants, revealed marked pay discrepancies among county employees who do similar jobs in different departments. As a result, the council will consider a 2.86% increase in salary spending next year. But not everyone would get the same raises, or a raise, necessarily.
Employees who make less than the midpoint for their job would receive raises. For example, one certified appraiser would get a $6,500 raise, while a juvenile case manager would get a $3,000 raise to meet the midpoint salary for all similar jobs.
With clear evidence of the discrepancies and the funding needed to correct it, the county’s salary committee is recommending action this year.
“We are always wanting to do what we can for employees. We are in a position this year to right the ship, so to speak,” Ison said.
To avoid widening the gaps between employees, the committee recommended against giving permanent raises to those who are already above the midpoint in their job category, West said.
Instead, the committee is recommending one-time stipends as a way to give raises to higher-paid employees without creating a long-term obligation with budget shortfalls looming in 2022, Ison said.
“The reason we are doing this is because of COVID-19, and us not being sure what the outcome is going to be next year and in the coming years,” he said.
That uncertainty was palpable as the county’s financial adviser, Mike Reuter, shared his predictions recently.
The picture for 2021 is rosy only because the state will disburse 14 months of tax collections for next year’s budget, due to delayed tax disbursements stemming from the pandemic, he said. Budgets increased for most counties solely because of that change, he said.
“You increased … but it is misleading because of what is included in the collection period for the 2021 distribution,” Reuter said.
In 2022, the county’s budget will decrease markedly because it will only receive 10 months worth of tax collections. Right now, Reuter says the county should anticipate about $37.3 million in revenue for 2022, with $39.7 million in expenditures, a $2.4 million shortfall.
The hope is that the county will be able to add to its cash balance next year by underspending, ending the year with a $17.1 million balance, which would give the county more cash on hand to avoid potential cuts to county services.
Reuter’s projections show the county’s available revenue increasing by about $1 million each year after 2021, but its expenses outpacing that, causing shortfalls in excess of $2 million a year.
By 2024, revenue could still be below that of 2021, Reuter said. That year, the shortfall could be just shy of $3 million, he said.
Without spending cuts, the county’s cash balance could drop to $9.2 million by 2024, Reuter said.
These figures are not final and could change as the county goes through the budget process.
