Pinellas County Administrator Bob LaSala's revelation that the county faces a $40 million shortfall as it starts work on its 2011 budget — and even bigger shortfalls in future years — was just part of the bad financial news out of county government last week. LaSala was talking about the county's General Fund, which pays for items not supported by user fees or dedicated funds. But the county has 10 other major funds and some of those are forecast to be out of balance over the next 10 years, too. And in some cases, about the only way to balance them is to collect more money from residents.
The balance in the Transportation Trust Fund, for example, is eroding, mostly because the state and local gas tax collections that feed the fund are flat. People are buying less gas, so less gas tax is collected. Either services supported by the fund — road and sidewalk maintenance, bridge repair, traffic signal operation, among others — will be cut or the gas tax will have to go up.
The county's water fund and sewer fund are showing revenue declines because people are conserving water and foreclosures have left thousands of homes empty, with no one inside to help pay the cost of bringing water through the pipes into those neighborhoods. Yet the water and sewer systems already in the ground still must be maintained and periodically updated.
The county water and sewer systems operate as "enterprise funds," meaning that the users have to pay the full cost of the services, with no taxpayer subsidy. Fewer users means that each customer must pay more to cover the systems' costs. So the county forecasts that rates for county water users will have to go up 13 percent in 2011, 13 percent in 2012 and 3 percent per year through 2019, and sewer rates will have to rise 2.5 percent a year through 2019. Since the county also sells water to city water systems, their rates may be forced up, too.
The county's Emergency Medical Service Fund comes up short in the county forecast. The EMS fund is supplied by an EMS property tax. The county contracts with 19 fire departments to supply emergency first responder medical services. But tax revenue is down because property values have tumbled in Pinellas, and options for increasing that revenue are limited because Florida voters and legislators enacted limits on how much taxes can be raised. Shortages in the EMS fund and the county's demand that fire departments cut costs led to battles last year between the county and the fire departments, with fire officials arguing that some cuts put patients at risk. The battle is likely to heat up again in a few weeks.
The fund in the best shape through the 10-year forecast period is the Airport Fund, but it isn't because there has been a big jump in the number of people flying in and out of St. Petersburg-Clearwater International Airport. Indeed, the airport has struggled to retain commercial flights. But it is sitting on a golden egg: 2,000 acres of land smack dab in the middle of the county on two of its busiest roads. The airport is doing a booming business leasing out land. No county tax dollars are used to operate the airport.
It is the projected shortages in the General Fund that most concern LaSala, especially since there were layoffs and cuts in services last year. The county Office of Management and Budget predicts that the $40 million gap between revenues and expenditures in the 2011 budget will grow to $70 million in 2012 and $85 million by 2016. To LaSala, those numbers indicate a need for drastic action, such as a reorganization to flatten the county bureaucracy and a much-reduced menu of services. If you layer on the shortages in other county funds, the size of the challenge for the county staff and commissioners is apparent.
"This is going to cut very sharply, very deeply into services. We need to prepare to cut services considered essential," LaSala told county commissioners Tuesday. "They are essential as long as you have enough money to provide them."
Diane Steinle is editor of editorials for north Pinellas editions of the Times.