Osceola County commissioners Friday afternoon at their retreat heard that falling property values could mean they may have to cut the county’s 2010-11 general fund budget anywhere between $27.4 million and $34.3 million unless there are tax increases.

In addition to lower general fund revenue, the emergency medical service fund, the library fund and the SAVE Osceola fund (land conservation program) could see a collective reduction of $5.7 million for the next fiscal year, forcing cutbacks in those areas as well if the 25-percent drop in property tax revenue comes to pass.

Freilinger said the property appraiser initially estimated assessed value would drop from 15 percent to 20 percent but revised that estimate, mostly due to updated information for commercial property which is becoming more distressed in terms of foreclosures and falling values.

The options

The county manager suggested a number of options to make up the shortfall:

• Save $1.8 million by cutting all subsidies not required by law for local agencies, organizations and events, including the local Boys and Girls Club, the Veterans Tribute and Museum, Head Start, the Three Kings event, myregion.org, the Small Business Development Center, the Osceola County Health Department and the Metro Orlando Economic Development Commission.

• Save $4.1 million by not using the general fund to offset any fire assessment fees for certain classes of property as commissioners did last year.

• Quit subsidizing funds to the tune of $11.9 million that are not carrying their own weight, such as the transportation fund, which had a $9.4 million subsidy in the current budget, for example. Raising the gas tax 5 cents per gallon, as proposed previously, would generate $6.6 million for the transportation fund. Diesel fuel would be exempt from this tax.

• Take $10 million from the county’s unrestricted reserves and use it for capital projects.

• Reduce all county employee salaries – including those at the constitutional offices – by 5 percent and require employees to pick up the cost for their family members’ health insurance. Together, these cuts would save roughly $8.8 million.

Cutting all the funding not mandated by state or county law along with the salary and benefit cuts could still leave the county roughly $7.6 million short in the worst-case scenario just in the general fund, according to retreat documents.

“The earlier we make decisions on the budget, the better,” Freilinger said, adding that he is not advocating the “elimination of any positions.”

Commissioners respond

“I’m not in the mood for firing people,” Commissioner Brandon Arrington said, adding that the county subsidizing fire fees last year was a mistake.

Arrington also said he doesn’t want to see the county “padlock parks,” that the county manager should poll county employees about the potential salary and benefit cuts and that he didn’t support cutting transportation funding.

Commissioner Michael Harford said he still favors a gas tax increase to help cover transportation costs because it is a “user fee,” would exempt diesel fuel typically used by commercial vehicles and the tax would allow tourists to help pay for local infrastructure.

“I’m not thrilled about a 5-percent salary cut and I don’t want to see cuts in our libraries,” Harford said.

Commissioner Ken Smith said he didn’t believe taxpayers would “stand still” for a millage rate increase.

“Closing fire stations, closing parks, closing libraries and salary cuts – these are things that might be forced upon us; you are going to have to prepare a no-tax increase budget,” Smith said.

Commissioner John Quiñones said balancing the budget should not include a millage rate increase and that the county would have to “live within its means.”

“Public safety – that is where we put our focus,” Quiñones said. Commission Chairman Fred Hawkins Jr. also said taxpayers “won’t stand for a millage increase.”

Hawkins also said he was for a salary decrease and that the county should look at consolidating services with the two cities in the county, including the fire, building and parks and recreation departments. He also said the county should consider closing the Kenansville and Narcoossee libraries, that there should be no property purchases using the general fund and that the county should look closely at its fleet maintenance operation.

None of the commissioners advocated raising the millage rate, though Arrington said an increase should be an option because property assessments could drop to a point where the revenue derived might no longer support basic services.

All of the commissioners did support using reserves as a source of funding some of the shortfall, as long as the money was used for capital expenses, such as road repair or bridge replacement, for example.