County has ‘serious’ budget shortfall
Early projections show $32.6M deficit
Since 2017, Shelby County Government has spent more money than it’s made.
Now, the practice is catching up to it. Preliminary budget projections for the next fiscal year show Shelby County Government with a budget shortfall of $32.6 million – and that’s before considering the additional $52 million requested by Shelby County departments and the schools.
If those requests were granted, the county would find itself with an $84.6 million shortfall in fiscal year 2021.
Some of the requests are unavoidable, such as funding for corrections and due to de-annexation, Mathilde Crosby, director of administration and finance, told commissioners Wednesday.
The county is also running a deficit in the debt service fund – projected at $14.5 million.
“I realized we were looking at a very serious shortfall for this upcoming budget season; however I think the numbers were surprising to me and the majority of the rest of the commissioners,” Commission Chairman Mark Billingsley said. “In county government you don’t have a lot of choices. You can cut or you can increase taxes. This commissioner has no affinity for increasing taxes.”
Other factors have also played a role in causing the shortfall, including a projected $8.8 million reduction in property tax revenues (half from appeals, half from there being fewer delinquent taxes and thus less interest to collect on delin
quent taxes) and a $9.8 million reduction in other revenues.
General fund expenditures are projected to decrease by $5.5 million, but that doesn’t balance the decline in revenue, even before the budget requests are considered.
“This is not going to get better. It’s going to get worse,” Commissioner Reginald Milton said Wednesday. “We need to deal with it today instead of dealing with it tomorrow.”
Milton said the way to deal with it would be a “tax adjustment.”
Shelby County Mayor Lee Harris will present a proposed budget to commissioners later this spring.
On Thursday, he said the process is still early and that “hopefully things will clarify over the next couple of weeks so we can put a budget in front of the commission that is careful and responsible at the same time.”
When asked whether the county was considering cuts to the budget, Harris said, “Everyone wants answers immediately, but the reality of a large organization with a billion-dollar budget is there has to be a process. We don’t want to get out in front of the process.” Harris said he will work to avoid a tax increase. “We want to be very careful and responsible to see we don’t have a tax increase,” Harris said.
Katherine Burgess covers county government, religion and the suburbs. She can be reached at katherine.burgess@commercialappeal.com or 901-529-2799.