BLOOMINGTON — McLean County is considering drastic measures to address a $1.5 million budget shortfall rather than laying off 20 to 25 employees.
County Board will vote Sept. 19 to temporarily halt annual raises, implement what County Administrator Bill Wasson called "a soft hiring freeze" and offer early retirement buyouts to 61 employees.
Wasson told the board's finance committee, which recommended the changes Tuesday, that they would help fight budget problems caused by drops in state funding and in locally generated revenue including income and sales tax.
Officials estimate the county would save about $600,000 per year by canceling raises for employees who aren't in unions. Corrections, dispatch and highway employees are guaranteed raises this fall under contracts, but those raises could end after their deals expire Jan. 1, said Wasson.
The county could save $1.25 million if all employees over 55 years old with 18 or more years working for the county took early retirement. Employees would have 60 days to decide whether to accept one of three packages with varying cash payouts based on service, balanced against continuing to receive health insurance paid by the county for a specific amount of years.
Committee Chairman David Selzer said he likes offering an early retirement plan before laying off employees.
"Voluntary is better than forced any day of the week," he said.
Wasson said officials will create a 2018 county budget that works even if employees don't volunteer for early retirement — an outcome they won't know for sure until after the board approves the budget Nov. 21.
The committee also recommended moving hiring decisions from administration to the committee's jurisdiction, which Wasson referred to as a sort-of hiring freeze, and changing county policy to allow officials to demote or otherwise relocate employees whose jobs will be cut.
Board Vice Chairman Jim Soeldner questioned if the county could address the shortfall by cutting costs, and member Chuck Erickson asked about spending from the county's general fund balance, but Wasson said those measures will be considered in addition to personnel policy changes.
"I will never say that there aren't more savings we could experience and more avenues that we can take," he said. "This is less about solving the immediate problem than solving the problem over several years."
In addition to losing $130,000 in sales tax due to a new state collection fee, county officials expect to lose $500,000 in personal property replacement tax revenue from the about $1.8 million it now receives per year. The state pays local governments PPRT as a replacement for personal property taxes on businesses, which were phased out in the 1970s.
Wasson noted that when Peoria County did a similar buyout program this year, it used former Community Development Assistance Program money, funding resulting from a federal grant program that was intended for small-business loans from local governments but which is now free for other uses.
McLean County Board has been discussing for months how to spend its CDAP balance, about $1 million, and Wasson said he expects discussions to continue despite the budget crisis.
"The challenge is that the budget is largely personnel based, and a solution that only solves the budgetary issue for one year ... must be replicated year after year," he said.
Wasson said the 25 employees who could be laid off and the 61 employees eligible for the early retirement buyout are spread across county departments and pay grades. He said some could be replaced by employees who make less, and some positions would be eliminated.