County budget mess -- just getting interesting
The budget mess at the Tulsa County Courthouse is just starting to get interesting. County Commission Chairman Randi Miller is asking the State Auditor's office to find out where the projected surplus went. It's being called a transition audit -- rather like counting the money at the end of a cashier's shift so the next cashier starts clean. Wayne Carr had announced on April 29 that he is retiring after 25 years for health reasons. It was Mr. Carr's budget projections that led county officials to believe they would have a lot more money to spend than they actually did. Word is, though, that Commissioner Miller was pushing for an external audit even before Carr announced his retirement.
The County's internal auditor for the last two years, Clarence McClain, quit Thursday and was quoted by county fiscal officer Wayne Carr as saying it was a choice of hitting somebody or leaving.
It's tough to piece all this together, because Tulsa County budget info is not available on the Internet.
Think back to the Vision 2025 campaign last summer, when we were told that we should have confidence in the County's ability to manage a billion dollars because of their sound fiscal performance in the past. We were reminded that Tulsa County was untouched by the County Commission scandal back in the '80s.
Back on October 6, 2003, less than a month after Tulsa County voters approved the Vision 2025 tax hikes, County Commissioners Bob Dick and Wilbert Collins, in Commissioner Randi Miller's absence, voted themselves a 5% pay increase, bringing their salaries from $81,019.50 to $85,070.50. The County's finances seemed to be in good shape, and Commissioner Collins believed the pay raise was justified by the success of the commissioners in convincing voters to part with more of their money:
If we look back over the year and see what the county has accomplished, I think that justifies it.
Here's the amount approved by the County Budget Board for the last four years.
FY 2001 $43.7 million
FY 2002 $48.9 million
FY 2003 $57.5 million
FY 2004 $56.5 million
The budget for fiscal year 2004, which ends on June 30, was $56.5 million. It was originally projected to be about $53 million, but at the last minute county officials were told they had an additional $3 million to spend.
At the end of FY 2001, the county carried over $16.6 million. There was talk of cutting property taxes, at the City of Tulsa inquired several times about reclaiming a share of property taxes to cushion the city's ailing sales tax revenues. Instead of cutting rates or helping the city, county officials found ways to spend the money and the county budget skyrocketed.
Even with the spending increases, Tulsa County was still projected to run a surplus each year. That surplus provides a cushion and reassures holders of Tulsa County's general obligation bonds that they will be paid. That reassurance helps our credit rating, which in turn affects the interest rate the county can get on bonds.
Wayne Carr had projected an $11.6 million surplus going from FY 2003 into FY 2004, which is just about to end. In October 2003, it was revealed that the actual surplus carried over was only $4.9 million -- a $6.7 million error. Revenue projections for the next fiscal year are only $46 million -- a massive drop from last year's budget, and one that will require massive cuts to achieve the level of surplus that bond rating agencies expect to see.
The impression I get is that the county budget process has been handled a bit too casually over the years, and thanks to big surpluses no one really noticed. A report from the task force appointed to look at the vanishing surplus suggests that too much of the information about the process is locked up in one man's brain. The sudden departure of the county's internal auditor suggests there may be more than sloppiness at work. It will be interesting to see what emerges from the external audit.
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