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Hernando Commission wise to fatten rainy day fund

Greeted with a potential windfall of more than $900,000, Hernando commissioners had two choices: Earn political points or stick the money in the bank for a rainy day.

A commission majority smartly checked the weather report and picked prudence over politics. Thursday morning, during an emergency meeting, the board voted 3-1 to save the possible income from a $168 million bump in the tax roll. The increase is attributed to a late-arriving accounting of tangible personal property — mostly equipment and inventory owned by the county's largest commercial operations in the mining and utility industries.

As valued by the Property Appraiser's Office, the tangible property could generate $910,000 for the county's strapped general fund, and a combined $210,000 for health, transportation and emergency services. Only Commissioner Wayne Dukes failed to resist the temptation to try to lower the current tax rates. He incorrectly characterized the potential income as a nest egg built on the backs of business owners.

His logic is short-sighted considering the money may never arrive. An attorney for Cemex Inc. promised to challenge the appraisals, just as the company did successfully last budget year, leaving an unanticipated gap in the general fund. Spending money you might not get is never a good idea.

Duke's sentiments also failed to acknowledge the just-adopted budget is balanced because of a plan to borrow up to $1.5 million from a reserve account next April if additional spending cuts are not made. Those dollars from a so-called stabilization fund must be repaid within two years.

Commissioner John Druzbick accurately noted the imprudence of allocating the money to a tax cut: "It's just too iffy if we do not get it.'' Indeed. But the commission still can choose to tackle another scenario that may placate Dukes. If the county identifies further cuts, and if the property appraiser prevails in the assessment challenges, the $910,000 can still be applied to potential tax relief in the 2013 budget.

Even tightfisted Commissioner Jim Adkins saw the wisdom of rejecting an immediate property tax reduction. Without his welcome acquiescence, the commission faced the potential of a 2-2 deadlock in light of Commissioner Jeff Stabins absence.

Saving unexpected income to limit future borrowing is sound financial strategy. Blowing money you don't have is reckless and certainly alters the definition of fiscal conservative.

Hernando Commission wise to fatten rainy day fund 10/08/11 [Last modified: Saturday, October 8, 2011 11:11am]
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