Hall County officials have told the Board of Commissioners to brace themselves for a tough budget year ahead.

"The 2012 budget preparation process has begun. I don't want to mislead anybody, 2012 for a variety of reasons may be the most difficult year any local government in this state has faced," interim Hall County Administrator Jock Connell said.

At Thursday's commission meeting, Interim Finance Director Lisa Johnsa gave commissioners a progress report on the budget for fiscal year 2011, which began in July 2010 and will end June 31.

"I'm not concerned about how 2011 will end. I think we will fall within budget and that revenues will come in right where we budgeted," Johnsa said. "What that will mean is that the general fund's balance will remain flat."

The general fund will likely face more challenges in fiscal year 2012, which begins July 1.

"Property tax revenues are going to be down compared to 2011," Johnsa said.

Due to a new state law, counties are required to send an assessment notice to each property owner notifying them of the value of their property, regardless if it has changed.

The higher volume of assessments will mean a higher number of people appealing their property values. The likely outcome is that many values will be lowered.
Johnsa estimates that could decrease the county's tax digest by $1.8 to $3.3 million.

"But that is very much an estimate and as we move forward those numbers will solidify a little bit," Johnsa said.

The budgeting process likely will be difficult as the county has already had austerity measures such as furlough days and hiring freezes in place for several years.

"Hall County has already taken many strong measures to control costs. The county is very lean in terms of staffing," Johnsa said. "At this point I think it will be a matter of looking strongly at service, core service delivery requirements and what services can be cut back.

"It's not a matter of trimming a little bit everywhere. That's probably come to its limitation already. It's now what services can we cut back."

When it comes to sales tax revenue, Johnsa has more concerns.

Collections in special purpose local option sales tax VI, which was planned to collect $240 million over six years, are significantly lower than expected.

"We're not making those projections. Overall, the program is not going to make $240 million," Johnsa said.

"Looking at the history of the first 18 months, we're going to be 25 percent down overall."

Johnsa said the finance department will create a revised SPLOST plan for the board to adopt during the 2012 budget process.

"We're not going to be able to do all the projects to the magnitude they were originally spelled out in the referendum," Johnsa said.

This upcoming year will be especially tough due to compounding attacks to the budget. For example, a home foreclosure that happens in 2010 will affect the 2011 budget.

"Some impacts of the economy come to fruition later," Johnsa said. "When you have declines in the economy you feel it immediately in LOST, in SPLOST. But you don't feel it in property tax because there's a catch-up time until you feel it in your property tax base. It happens in arrears a little bit."