The Cuyahoga County Council Committee on the Whole met on October 10, 2017, as the budget process for the 2018-2019 biennial budget is now underway. The meeting began with 10 of the 11 Council members in attendance (Councilman Schron was absent). The Committee heard an overview of the proposed budget by County Executive Armond Budish. The county executive laid out a number of strategic priorities in his first term, and his charge is to try and build on the momentum that he has built on universal pre-K, combating infant mortality, and investing in workforce development, while maximizing the impact of the money that has been invested thus far. Uncertainty around the future of the Affordable Care Act, Medicaid, and the Children’s Health Insurance Program (CHIP), changes to the Medicaid Managed Care Organization (MCO) taxes, cuts to the Local Government Funds, an aging population, and the opioid epidemic all will loom large over the coming weeks.

Heading into the budget introduction CCS produced a County Budgeting Matters that previewed many of the factors at play. To read the county budget preview, click here.

According to testimony provided by the County Executive, the new budget proposes a number of different ways to fund county government:

• The administration proposes to shift about $17 million from the housing demolition fund and direct it to the General Fund. The county previously pledged $50 million to housing demolition in neighborhoods that are disproportionately impacted by deteriorating houses. Shifting these funds, even with the additional federal funds that became available to offset the move, could prove to be a tough sell to councilmembers and members of the public who would prefer to see more demolitions and/or a faster timeline.
• Additionally, the county administration is proposing to move $7.5 million ($2 million more than what was expected) from the .25 percent sales tax fund to the General Fund.
• The county also proposes using Public Assistance funds (also known as PA funds) to apply to the county budget. These are federal dollars that are reimbursed to the county. In the past two years, the administration has sought to maximize federal reimbursements for health and human services.
• The administration also proposes to use $4.5 million in unclaimed funds from county residents, which if left unclaimed, will be transferred to the General Fund.
• Finally, the county is proposing to spread the $25 million received from the state to offset the MCO sales tax loss over 3 years in order to stretch its impact on the budget. The county is not anticipating any additional revenue from the state to cover the MCO sales tax revenue loss.

Each of these moves represent one-time-use proposals, which may create challenges for future county budgets.

The administration’s budget anticipates that it can raise about $5.5 million over the biennium by regionalizing the jail system, allowing cities to pay the county to take over, and thus saving cities money in the long run as well.

The administration also proposes to enforce a law that establishes a rental registry system, which helps cities with enforcement, but also should allow the county to raise $3.5 million over the biennium.  The fee proposal has not been presented as legislation, nor has it been vetted by County Council.

The budget presentation included new statistics, such as data that project an estimated 850 individuals in Cuyahoga County will die from an opiate overdose this year. In light of that, County Executive Budish said that the ADAMHS Board will not face any cuts in this budget (compared to last budget, when they initially faced a 17 percent cut, which was restored using HHS levy funds).

Council President Brady inquired about additional resources being directed to the ADAMHS Board given the impact of the opiate crisis. Office of Budget and Management Director Maggie Keenan explained that the administration is planning to establish a “reserve fund” of $40 million that can be allocated should an unexpected health care crisis arise. County Council members questioned this, as they continue to be concerned that the Health and Human Services Levy Fund Reserves are scheduled to dip to 9 percent in 2019 and the Fund is projected to run a deficit in 2020 and 2021. Council members questioned the difference between a code-mandated 10 percent reserve fund for the HHS levy fund, and a reserve fund that is supposed to be for emergency uses as they arise. In the coming four to six weeks Community Solutions will closely monitor and report on this issue and other budget proceedings.