MORGAN COUNTY
The Morgan County Board of Commissioners officially adopted its FY27 budget on Jun 16, after several weeks of conflict over its two initial proposals, A and B.
The board ultimately presented a third option, Budget C, as a compromise between the two initial proposals and worked on developing it shortly before the Tuesday evening meeting.
The Board of Commissioners ultimately approved the proposal to use option C as the FY27 Budget after a 3-2 vote.
The vote came down to a tiebreaker, with commissioners Carl Jones and Nathan Park voting in favor of the proposal, while commissioners Ben Riden and Phillipp von Hanstein opposed it. District 2 Commissioner and Chairman Blake McCormack broke the tie in agreement with the proposal to carry the motion.
“This budget does not create any type of millage increase or use the fund balance. That keeps the millage at 9.466 mils,” said Adam Mestres, county manager. “The only thing that this budget does not do is give any allocation for the extra positions or the positions that were requested from the departments that you heard from last week.”
Mestres explained that Option C’s total budget was $300,000 less than Option B’s, due to a $514,166 shortfall in Option B’s general administration budget.
“It’s not any new revenue. We’re just taking it out and setting it aside in a fund balance that the board would have to approve at a later time,” Mestres said. “Option C is funding all the positions that were requested, moving to $300,000 to committed fund balance, and then you have a shortfall of $201,662.”
Budget C proposed using the $201,662 in fund balance, equivalent to 0.114 mills.
“You can either pull from fund balance or appropriate equivalent millage, which will be $18.01 for every $400,000, and we use $400,000 because that’s the average, that’s the median household value in Morgan County,” Mestres said. “Obviously, some [citizens] have housing values more, some have housing values less, and that’s the estimate.”
Both Commissioners Riden and von Hanstein shared their concerns about the new proposal regarding the use of fund balance. Von Hanstein wondered what the move would mean for the budget going forward, while Riden suggested that withdrawing $201,000 from their fund balance wasn’t ideal.
“This is new growth with eight positions, and it’s about $900,000 upon these positions,” Riden said. “If that’s what the board wants to do, that’s fine, but with financial management one-on-one, you never dip into your existing carryover. You fund new growth from enhanced or new revenue.”
Mestres explained that a bulk of the fund balance comes from property taxation and that it is important to utilize the money to “pay the bills, make payroll, and handle all of the county’s obligations.”
The FY 27 budget conflict was also largely driven by concerns over the increase in property tax revenue relative to the FY 26 budget. McCormack explained that the rise in property taxes is directly related to Senate Bill 581, and that the price was not in the county’s control.
“This has been a very, very tough budget, but Senate Bill 581 was passed two years ago, under the legislation that froze property tax values. The intent of the bills was a great idea, but I just don’t agree that they should have done it at their level, and it should have been something we could do in our control,” McCormack said.
“The reason I say all this is because values in the state, and especially in our county, have been going through the roof, I mean, people are paying $35,000 an acre for agricultural property in Morgan County, which is crazy.”