Dane County's financial situation is in worse shape now than it was projected to be in May, which officials said will make next year's budget even more difficult to balance without the possibility of layoffs or deep service cuts.
County departments reported an $11.6 million deficit based on second-quarter revenues, an increase from an $8.8 million deficit in May, which prompted the county to negotiate employee pay cuts and freeze spending.
The 5 percent salary cuts in the second half of the year saved about $3 million, but sales tax projections and other revenues took a bigger nosedive than expected.
In May, the county was expecting sales tax revenues to be $2.6 million below budget. They now expect them to be $5 million down.
"It's almost impossible to project accurately what has gone on to our economy over the last year," Sup. Brett Hulsey, of Madison, chairman of the personnel and finance committee. "We thought the projections we made in May were good enough to address the situation we were in."
As a result, next year's budget will be even more difficult to balance without unprecedented cuts in spending or a big property tax hike.
County Executive Kathleen Falk warned the County Board on Friday that department budget requests would require a tax levy of $145 million, a 22.43 percent increase from this year's $119 million levy, an increase well above state-imposed local tax levy limits.
By comparison, last year's department requests would have resulted in a $16.3 million tax levy increase, or 14.3 percent. The budget that passed increased the property tax levy 4.63 percent, or about $5.4 million.
"From the county executive to every elected official, there is an intensive effort to save money and to generate more revenue," said Topf Wells, Falk's chief of staff.
When the county drew up its 2009 budget last November, officials predicted the general fund reserve would be $10.4 million in the black at the end of the year. If the projections stay on track, the county would lose its entire general fund reserve and would have to rebuild it in the 2010 budget, Wells said.
"Some supervisors were trying to convince folks that there were going to be problems in this economy last November," Sup. Ronn Ferrell, of Madison said in reaction to the new numbers. "We have less than no cushion, which does not bode well if the economy doesn't improve."