A $500,000 shortfall in Escambia County’s general fund budget means nothing is off the table – including layoffs – commissioners discussed Monday.
While commissioners agreed staff reductions are the last resort, all said immediate cost-cutting measures must be implemented, including a hiring freeze of non-public safety personnel and limiting purchases to essential items and all travel, unless approved by the commission.
County Administrator Tony Sanks said less than budgeted oil and gas production privilege tax accounts for $500,000 of the shortfall. Additionally, in the next fiscal year, an increase in health insurance premiums is projected at $83,000, he said.
While the lagging collections aren’t a new problem, Sanks said the county was able to start the current fiscal year with a slight surplus in the general fund.
“That surplus was a culmination of revenues that exceeded our expenditures for the year,” Sanks said. “Unfortunately, that is not the situation headed now.”
Commissioners are now tasked with finding a solution to the funding issue before the end of the fiscal year.
“Ten months of our fiscal year is gone,” Commissioner Larry White said. “By law we must have a balanced budget prior to Oct. 1. We had a carry over from the previous fiscal year, which helped us, but with the rapid decline of oil and gas tax money, we have to start now getting our financial house in order.”
Sanks said oil and gas production privilege tax revenue – funds earned on the sale of gas and oil throughout the county – is currently at 52 percent of its budgeted amount for the fiscal year.
“Where we are now, in the year, that number should be 75 percent,” Sanks said. “Our situation won’t change, and we need to save what we can this year. This is a problem that won’t go away any time soon.
“We’re in quite a hole,” he said. “We need to take any action to cut expenses we can.”
Under state law, the county’s general fund budget operates separately from its road and bridges (R&B) budget – which means R&B funds can’t be used to cover the deficit.
Chairman David Stokes said measures approved Monday aren’t a cure for the shortfall.
“There’s not a cure all,” he said. “For every dollar we don’t spend, that’s one dollar closer to solving our problems.”
When Commissioner Brandon Smith questioned what the next step might be, Sanks said one must look at the largest county expenses – personnel.
“If you look to save, you have to look where you spend,” Sanks said. “Worst case? Layoffs, cut hours. People have to know how serious this is. It’s tough times. No one wants to consider that, but we may have to.”
Commissioners will continue budget discussions at their next meeting.