The Warren County Commissioners have released the 2025 budget for public review.

The spending plan charts a course to fund county operations and essential services while also meeting obligations that the commissioners have in the community, such as funding for the county’s library system and match dollars for the Transit Authority.

Put simply, though, the county has not been receiving revenue at levels required to cover the cost of required operations.

“Things have come up that were unexpected or unplanned for,” Commissioner Ken Klakamp said.

Commissioner Tricia Durbin believes the board has a handle on the scope of the problem that underpins that crisis. “I think we’re taking a lot of steps now to alleviate a lot of the challenges,” she said. “We need to take a new, fresh look at some cost structures and find ways to be more efficient with the cost relationship there.”

One such example? A change in pharmacy benefit manager which is expected to save roughly $150,000 in 2025 and a change in brokers and stop loss providers will generate $300,000 in savings.

The prior board of commissioners raised taxes by two mills for 2024, raising nearly $1 million. The 2025 budget includes an additional 1.25 mill increase. That brings the county’s tax rate to 25 mills, the maximum allowed by the county code. The ongoing property reassessment must be revenue neutral so, when that process is complete, the county’s millage rate can be reduced in light of the increased property values details in the reassessment.

The county’s millage rate – 25 mills – is now at the maximum allowed by the county code. Additional taxing capacity will not be available until the county’s ongoing property reassessment is complete.

From there, the commissioners believe that small, incremental tax increases are part of responsible future financial planning.

“I think we were remiss in not having small increases in millage,” Durbin said. “We ended up with a wake-up call for the first time at the end of 2023, realizing that was probably not wise because we weren’t paying attention to our own rising costs.”

Ongoing cash flow challenges have been rooted in factors both internal and external to county operations.

Durbin cited “increases in wages overall which had to occur during the pandemic and right after to maintain our employment base” as well as a “run-up of healthcare costs across the board.”

Fiscal accounting under previous administrations also left pending annual debt payments totaling $650,000 out of the budget as an expense. Tax anticipation note terms – the funding the county borrows to cover expenses until tax revenue comes in – were particularly unfavorable in 2024, as well.

Along with rising costs, external forces that have heightened these financial challenges come from commercial tax appeals that have resulted in a decrease in revenue of in excess of $200,000 while an additional $250,000 in taxes is delinquent.

In addition, a critical 911 program is not fully funded by the Commonwealth. In 2023, the audited financials show a loss of $388,000, which required the county to make up that shortfall with general funds.

Klakamp explained that there have been 19 successful corporate tax appeals since 2017 resulting in the loss of over $9 million in taxable value.

Klakamp also noted increases in workmen’s compensation and liability insurance rates and the tax base implication of expanded state game lands.

Reassessment could claw back some of the revenue lost due to those appeals.

“I’m hopeful that all those commercial properties will put their values back on the tax rolls in a manner that will increase their taxes as they should be,” Durbin said.

In response to the challenges, a soft hiring freeze was implemented, capital expenses were eliminated and a $500 purchasing approval threshold to improve liquidity and slow spending. Positions that became vacant have not been refilled.

Commissioner Dan Glotz noted that the TAN terms for 2025 are more favorable, operating “more like a line of credit” than a traditional loan.

Warren County was awarded $7.5 million in American Rescue Plan (ARPA) funding and has relied on that funding to help shore up operational deficits in recent years.

Durbin said $1.9 million was utilized to balance the 2022 budget and an additional $1.5 million in 2023. The total utilized in 2024 will not be done until early 2025. The commissioners believe that the burn rate will slow in the new year.

“We aren’t alone,” she said, noting that the county’s auditing firm has told them that “multiple counties are using ARPA to cover operations.” A total of $3.5 million remains from that funding and the commissioners would “really like to use it for capital (expenses) and save it for a Rainy Day Fund.”

“We’re doing all the things we need to do to put our best foot forward fiscally,” she added. “It’s not easy.”

“It’s a tough situation,” Klakamp added. “The employees, they need to make a living. It’s tough when you don’t have the funds.”

The commissioners intend to approve the spending plan at a meeting on Wednesday, Dec. 18. The session will start at noon and be held in the Jackson Courtroom at the Warren County Courthouse. The 2025 draft budget will be available for public review at the Courthouse.