A budget update has Warren County supervisors alarmed enough to start talking about where to make cuts, possibly in the board’s donations of tax money to charities.

“It’s a frightening situation,” said District 5 Supervisor Richard George, board president. “This year’s budget is a done deal, and we’re just going to have to make cuts and conserve where we can — but next year’s could be the worst one ever.”

Payment claims to the county’s self-funded health insurance plan are exceeding expectations, County Administrator John Smith told supervisors Thursday. That led them to consider making cuts in every department and slicing charitable donations by 10 to 12 percent.

“This is the first year we’ve ever blown past the budget amount (on health) like this,” said Smith, who noted personnel spending is in line and no jobs should be in jeopardy.

The county operates on a spending plan that starts anew each Oct. 1. With only one-third of the fiscal year gone, about $329,500 more has been spent on claims than was budgeted for the 12-month period that ends Sept. 30. Under the county’s plan, it pays the first $50,000 on major claims. Smith said about 11 major claims for employees battling illnesses such as cancer and heart conditions had jacked up county spending on health insurance to $529,500 through Jan. 21.

The increase is creating a cash-flow problem for the county by forcing it to use more money than anticipated from its gaming fund, which it attempts to keep for non-recurring expenses. The fund is also being burdened by three costly NRCS projects, said Smith. Budgeted expenditures for soil stabilization projects on LeTourneau Road and 14 other sites around the county are $2.84 million this year, of which $1.57 million has already been spent. The federal government reimburses the county 85 percent of the costs. However, Smith said only about $124,000 of the $1.46 million owed to the county has been paid back. 

The gaming fund — which is made up of the county’s share of tax revenue from the city’s five casinos — has thus far netted about $485,000, roughly $20,000 less than the county expected. The county anticipated receiving $2.95 million from casinos this fiscal year, but budgeted to spend about $500,000 less than that in the event tax revenue was down.

Supervisors said the numbers mean all department budgets, as well as outside spending on charitable and non-profit organizations, will likely have to be cut before the year is out.

“There’s not much else we can do,” George said. “We always go six or seven years where we spend less (on health insurance) than was budgeted, then every so often we get hit like this — and it always seems to come at the worst time.”

Smith said he would prepare and send letters to all department heads and outside beneficiaries about potential budget cuts. The county had budgeted giving $1.8 million to organizations such as United Way, Mississippi Children’s Home, Red Cross, The Initiative and Boys & Girls Club, receiving required legislative approval where required. Smith said none of the organizations have received full funding yet.

Barbara Tolliver, West Central Mississippi United Way executive director, said a 10 to 12 percent reduction in funding from the supervisors would mean the call center and database in Jackson funded with Warren County money might not remained properly staffed.  

“I would hate to see a reduction by 10 to 12 percent,” said Tolliver. “I won’t have the staff to manage the database, and people will get incorrect or outdated information when they call and that’s a reflection on the community.”

Tolliver said she understands cuts may have to be made by the supervisors, and added overall support of United Way and other charities in Warren County is still seeing increases.

“Giving is about at a record high in our community,” she said. “Some companies and organizations are not funding us at the levels they historically have, but we’re seeing more pledges come from individuals — some who haven’t even been solicited.”

In years past, George said the supervisors have always spent any funds leftover in the health insurance fund, and suggested the board reconsider that practice.

“What we always did in the past was just dump any extra money into paving,” he said. “In the future we may want to keep a reserve fund.”

In September, the supervisors OK’d a $15.7 spending plan for this fiscal year that included the first increase in tax rates in several years, up by 2.79 mills over last year. Most of the money comes from property taxes.

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Contact Steve Sanoski at ssanoski@vicksburgpost.com