Benton County officials are bracing for a $9.1 million budget deficit and have instituted a hiring freeze. The news comes as officials prepare to finalize the 2025-27 biennial budget.
Beyond the shortfall, the County has to reserve for unanticipated contingencies, which means the total budgetary hole that needs filling will amount to over $20 million.
“There are several reasons for the projected budget deficit. Expenses have gone up because of historical high inflation, costs have grown dramatically for current construction projects, and the County increased all wages, salaries and benefits to higher levels than normal to help mitigate the growing economic pressures on all employees. There has also been stalled growth in the County which has led to lower revenues from property taxes, land use and building permits, and document recording fees. Finally, there have been reduced levels of state and federal funding, and we’re still waiting to find out how additional federal funding freezes and downsizing will impact the County,” wrote County Administrator Rachel McEneny in an email to county employees.
The numbers
Like any responsibly budgeting municipality, Benton County seeks to set aside some of its revenue for reserves and contingencies. McEneny says the best practice would be a 12% reserve, which would amount to $11.5 million. When you add up that reserve and the newly projected $9.1 deficit, the total budget shortfall would be about $20.6 million for this upcoming two-year budget cycle.
McEneny says the County’s Financial Services Division has worked to identify $19.9 million in recommended adjustments.
“This plan includes a combination of $11.3 million in one-time revenue increases and $8.6 million of budget reductions. As a result of this plan, the County should be able to continue its core services and maintain approximately 10.6% of total estimated General Fund expenses for General Fund reserves and contingencies for the 2025-27 biennium.”
The recommended budget adjustments include:
- Eliminating some positions that are currently vacant and won’t greatly impact the delivery of core County services.
- Increasing standard vacancy factors by implementing strategic hiring freezes throughout the next biennium.
- Reducing spending on materials, supplies, travel and training throughout the County.
- Eliminating the Employment Cost Index (ECI) adjustments for management and non-represented employees for both years of the 2025-27 biennium.
- Reducing the employer contribution to deferred compensation (retirement benefit) from 3% to 1.5% for non-represented employees.
- Downsizing County property and facilities through the sale of assets creating direct restoration to reserves.
- Transferring one-time other fund revenues and reserves to the General Fund.
“In addition to these proposed measures, the County will soon implement a hiring freeze for positions that don’t impact the delivery of essential services. This is an effort to maintain the ending General Fund balance closer to the 12% reserve level for the 2023-25 biennium. Law enforcement and mandated positions paid by General Fund are not affected by the freeze,” added McEneny in her email.
Not impacted by the hiring freeze
According to Benton County Public Information Officer Anne Thwaits, there will be some currently planned and posted jobs that won’t be impacted by the hiring freeze, these include:
- Law enforcement and other positions that impact public safety, many positions in the Health Department fall into this category.
- Positions that perform duties required by law.
- Positions not funded by the County’s (unrestricted) General Fund, like those with restricted funding sources such as grants.
Developing story
As stands, Benton County’s biennial budget is just about $500 million. However, a fair amount of that budget relies on state and federal funding that is more in flux than usual, and we could be headed for unanticipated outcomes in the general economy, as well. In short, as this story develops, we’ll keep you posted.
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