ANGOLA — Steuben County’s cash position was called adequate but the county must find a new source of revenue if it wants to increase wages for its employees.
That was the bottom line from financial advisor Jeff Peters of the firm Peters Financial Consultants, Greenwood, who has consistently told the county that it needed to increase its cash reserves in order to have a healthy bottom line. Peters spoke to the Steuben County Council on Tuesday during its regular meeting.
The magic number was 30 percent of its general fund, which typically ranges about $15 million for a reserve of just more than $4 million.
“You’ve gotten to that point,” Peters said.
The cash reserve is held for emergency spending and additional appropriations that are needed during the year. The council tries to build up the reserve annually, said Rick Shipe, president of the council.
“It also helps when you bond,” Shipe said. A healthy cash reserve helps with interest rates and shows the county’s ability to repay a bond. The county currently has the ability to bond for up to $15 million.
Several years ago the county’s cash reserve had decreased markedly. In those days, in the Steuben County Board of Commissioners’ meeting room, where the council also meets, a white board kept a running tally of how much money was in reserve for the county to draw on, reminding officials that funds were tight.
It has taken a few years for the county to get in the position it now finds itself, but now it’s time to face the reality that taxes must increase if the county is going to increase wages for emergency services personnel — the sheriff’s department and emergency medical service — if it wants to stem what has been a steady tide of attrition.
“We have got to stop the bleeding,” Shipe said.
Just how the council gets to that point is up for debate that will undoubtedly unfold in the coming months as the council starts its budget writing for 2020.
Peters said the council could increase the income tax by up to 1 percentage point. This only would impact wage earners, not people relying only on Social Security.
Shipe said increasing the income tax would impact those who would be getting the raises as well as the rest of the county.
“You have to raise some of them to pay some of them,” he said.
While the county might provide raises to most of its employees, the council has been looking at providing a significant bump to those in emergency services. Steuben County is paying its people in these categories much lower than surrounding counties. Often new hires will get trained then move on to employment elsewhere at higher wages.
Property taxes also could be raised to pay for raises, or there could be a combination of both a property and income tax hike.
The decision for the County Council is whether to raise income or property taxes. Shipe is expecting disagreement among his peers on what approach and how much to tax in order to raise salaries.
Either way, the council is tasked with a decision it historically has despised — raising taxes.
Steuben County has some of the lowest tax rates in the state. At one time the county had the lowest property taxes in the state.
Peters has been advising the county for more than a decade. While he makes recommendations based on data provided by the county, he doesn’t make directives.
“That’s why we’re a board of seven, not one,” Shipe said.