UNDERSTANDING THE COUNTY BUDGETING PROCESS

(Noblesville, July 17, 2020) - While we hear more about the federal and state governments for the laws they pass and policy decisions they make, it is the local governments that are responsible for public education, law enforcement, road maintenance, parks, public health programs and more. One very good way for people to get a solid understanding of the county government’s activities, is to look at its budget.

“There are a lot of different elements to the county budget, and it might be difficult to understand if you don’t have a background in governmental accounting and a familiarity with organizational budgeting,” said Robin Mills, Hamilton County Auditor. “Development of the annual budget in the public sector is more than just simple number crunching. The budget reflects a strategic plan that considers the needs and priorities of all stakeholders, from government administrators and employees to citizens and business leaders.”

Each department of Hamilton County has a line-item budget to track every dollar spent on personnel, supplies, operating and equipment costs. The county has operating budgets and capital budgets. An operating budget is a plan of current spending and the means to pay for it (taxes, fees, grants, etc.). A capital budget contains long-term spending objectives and acquisition of assets along with the means to pay for them including, borrowing and/or bonding. In each of these budget categories, Hamilton County has multiple funds, or budgets, that keep the designated public funding organized and transparent. Without a comprehensive understanding of Governmental Accounting and an in-depth knowledge of the county, the annual budget process can be confusing and complex.

“As auditor, I work with the other elected officials and department heads to develop the annual budget,” said Mills. “During the development of the budget we use information from the current year and previous years, current revenues and expenditure, cashflow, debt service commitments, financial reports, and capital plans. We need to comply with Department of Local Government Finance (DLGF) regulations and meet State Board of Accounts standards.”

The county budget is also at the mercy of economic and development realities that are often beyond its control and changes that may take place over the course of several years. And while county officials may be able to anticipate some of the impacts, they will also have to be ready to adjust the budget to react to them.

The county establishes its priorities by setting the funding levels and allocating the spending within the different programs. “The budget also shows how the policy commitments are constrained by available resources,” said Mills. “Because the county is limited in how we raise revenues – legally through tax limits and politically by tax and fee levels that are acceptable to the voters – we are constantly working to balance the demands of different programs and services. Ultimately, the county does not have sufficient resources to fund everything to the extent users of government services want.”

The county conducts an appraisal of the monetary value of property and tax is assessed in proportion to that value. While the budget numbers change every year, the overall budgeting process does not. In May, the county departments receive budget instructions from the Auditor’s Office. Contained within those budget instructions, is a budget worksheet that the departments fill out, based on the budget instructions. The departments have until June to get the budget worksheets back to the Auditor’s office where they are entered into the county financial system.

The Chief Deputy Auditor prepares the countywide budget book and in August, the departments present their individual budgets to the council at the budget hearings. The County Council then makes cuts to the departmental budgets and holds a public hearing on the official countywide budget in September. Final adoption occurs ten days after the public hearing. Before it becomes final, the budget has to be uploaded to the State, where the DLGF must certify it.

“Budgeting for Hamilton County is about more than finance,” explained Mills. “The annual operating budget serves as the county’s most significant policy document and operating plan. As county officials, we must be sure that the decisions we make financially, are going to continue to help the county be sustainable for many years to come.”

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Robin Mills

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