In the last four years our county finances have quickly degraded. Licking Count is now in our second year of deficit spending if we don’t move to control our spending projections show the county running out of cash in 2022.
Financial Health Indicators
The easiest way to see the deterioration in our county’s financial picture is by looking at the Financial Health Indicators provided by the Ohio State Auditor. These indicators are intended to be a simple way to gauge the fiscal health of entities across the state – cities, school districts, villages and counties are all examined and scored on a series of metrics. The results create an easy to understand picture of the county’s finances – and in our case it’s bad.
After years of careful, thoughtful management and shepherding of resources our budget picture changed. In 2015 we received a single cautionary flag on our annual Financial Health Indicator Report. There’s nothing particularly concerning about a single flag – the system is designed to raise areas of concern and that single cautionary flag should have given us pause.
In 2016 the area we had received a cautionary flag became critical and we received a cautionary flag in a new area. At this point our leaders should have sat up and taken notice. They should have started to have conversations about our spending, what our long terms goals were and how to address the areas where concerns were raised.
Instead they continued to borrow and increased our spending again. In 2017 we received two critical flags and three cautionary flags – a total of five flags across various areas including revenue, spending and borrowing. It was also when we moved into deficit spending.
Rather than working to find ways to rein in spending, they approved another budget that projects to be in deficit. Based on those projections we are likely to receive seven flags in 2018, four critical flags and three cautionary flags.
The indicators created by the Ohio Auditor show that groups with eight flags are likely to experience fiscal stress in the near future.
How did we get here?
It’s fairly simple – in the last 4 years our revenues have grown by just over 8% while our expenses have grown by more than 27%.
Our spending is up in every single category: Judicial and Safety, Social Services, Veterans, Debt Service, Capital Improvements and General Administration. Based on the 5 Year Projections prepared by the County Commissioners we are projected to remain in deficit for the foreseeable future and our cash reserves will quickly dwindle down to nothing.
The Auditor raised the flags, now it’s up to us to act on the warning. We need to examine our government, how we deliver services, how we can find new ideas and new ways to deliver those services while saving money. Bringing county public transit back under our control, opening a public defender’s office, turning Municipal Probation back to the city of Newark. All of these discussions should be on the table as ways we can improve service and conserve our resources.
I firmly believe that by embracing new ideas and new paths forward we can improve the services our government delivers and do it by spending less money. Other communities have done it and we can too.
If you’re interested you can look at the Financial Health Indicators at the Ohio Auditor’s website. You can find reports for Licking County, local school districts, cities, towns and villages.