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the 3-15-10 newcast

BURNET — Burnet County could be looking at either budget cuts or a tax increase if the state raises the county’s contribution to health care for indigents, a commissioner warns.

"That is really going to hurt the county," Precinct 1 Commissioner Bill Neve told local leaders during a recent city/county workshop hosted by the Burnet County Commissioners Court.

The meeting is a recurring session where various officials get together to discuss mutual problems and solutions.

During the same meeting of local leaders, Marble Falls Mayor George Russell painted a grim picture for his city’s budget forecast.

Meanwhile, the county may have to increase its indigent health-care contribution because state lawmakers likely will confront a decrease in state sales-tax collections, as well as a budget deficit of $15 billion or more during the 82nd legislative session, Neve said.

The state comptroller has recently reported reduced sales-tax collections, due in large part to the national recession.

The Legislature convenes in January.

For the time being, the county contributes about $500,000 annually to indigent health-care expenses. However, the state may ask for an additional $200,000 in 2011, Neve said.

That could mean the commissioners will either hold an election for a tax increase or else make cuts in the county budget, Neve said.

Budget cuts are far more likely to occur than a tax increase, he predicted.

"People are not going to vote to raise their taxes," Neve said.

No action was taken during the meeting at the Highlander Restaurant.

Marble Falls also will be confronting budget woes, Russell told the other officials.

“I look for one more year of really tough times,” Russell added. “Then, we will come back to the Marble Falls we used to know.”

City sales-tax collections in Marble Falls have dropped 7 percent for a loss of about $400,000 in the city budget, Russell said.

“That is a lot of money,” said Burnet County Judge Donna Klaeger, who also attended the session.

Most Marble Falls municipal employees have not seen a raise in two years, and the city may cut its budget by 15 to 20 percent or be forced to raise taxes during the next budget cycle, Russell added.

The city raised property taxes by 28 percent in the fall of 2008; the following year, the council lowered that figure by 2 percent. The council also approved a $5,000 property-tax exemption for all residents in September.

What’s worrisome for city officials is a measure on the May 8 ballot that would, if approved, grant a $50,000 homestead exemption to the disabled and those over 65, officials have said.

If that measure passes, it could lead to more budget cuts or even staff reductions, city officials said.

On a more positive note, the city’s bond rating recently climbed from Triple B-plus to an A rating, Russell said.

“We are still in good shape,” he added.

Meanwhile, the city of Burnet is currently in its best financial condition in six years, City Manager Michael Steele said.

Although sales-tax collections decreased, they dropped less than 1 percent, and new homes were built in the city last year, Steele said.

“Right now, we are in great shape,” he added.

Other officials at the meeting included Precinct 2 Commissioner Russell Graeter, Precinct 3 Commissioner Ronny Hibler, Highland Haven Mayor Peter Freehill and Marble Falls City Manager Ralph Hendricks.