York County looks to avert state budget impasse impact

Greg Gross

York County has joined more than 30 other counties in the passing resolutions aimed at limiting the effects of state budget impasses on local government services.

The resolution, provided to the counties by the County Commissioners Association of Pennsylvania, or CCAP, calls for the General Assembly to "put mechanisms in place to assure any future budget impasse or budget delay does not become a burden" on counties.

"We aren't placing the blame on one part of government," Doug Hoke, the vice president commissioner, said.

The impasse, which still persists, cost the county about $38,000 in fees and interest when it had to take out a $20 million loan to cover its cost to operate. The county also dipped into its coffers, spending all but about $2 million of its normally multi-million dollar cash reserves.

Wednesday, Feb. 3, 2016--Susan Byrnes, York County president commissioner. Bill Kalina photo

"This really was a burden," Susan Byrnes, the president commissioner, said. "We cannot allow this to happen again."

Commissioners unanimously approved the measure at their weekly meeting on Wednesday.

Locally: Just after the impasse started in early July, the county stopped making payments to some vendors, and a few months later it instituted a hiring freeze on noncritical positions; that has since been lifted.

"This prevented departments from filling vacancies except on a case-by-case basis. It was one of our approaches to manage cash flow given the halt in state funding that we were experiencing," Carl Lindquist, county spokesman, wrote in an email.

In October, the county was forced to open up the $20 million line of credit.

Under state law, the county had to pay the money back — even if state funds hadn't been released — by the end of 2015. However, the courts approved an extension of when the county had to pay up.

The county ended up drawing down nearly the full loan amount by the time Democratic Gov. Tom Wolf released about $23 billion of the $30.3 billion GOP-crafted budget sent to his desk in December. Wolf also vetoed parts of the budget.

In January, the county paid back the loan, well ahead of the end of March deadline, said Mark Derr, county administrator.

"We got the money in from the state and paid that off right away," he said.

Ripple effects: But the state funding didn't cover the roughly $33,000 in interest and bank and legal fees associated with the loan. And since the county technically defaulted on the loan by not paying it off by the start of January, it was hit with a higher interest rate on a $25 million Tax Revenue Anticipation Note it took out, Derr said.

Wednesday, Feb. 3, 2016--Doug Hoke, York County vice president commissioner. Bill Kalina photo

Derr said the county is paying about $5,000 extra in interest because of the higher rate.

The gap financing ensures the county has enough cash on hand to function through the first four months of the year until local tax dollars roll in.

Numerous other agencies that rely on state funding, either through the county or straight from Harrisburg, also had to take out loans because of the stalemate.

Options: There are numerous mechanisms CCAP is exploring to avert the effects of a state budget impacts on counties, including a court ruling that requires the state to pay employees even during a budget gridlock, said  Doug Hill, its executive director.

Since counties rely heavily on state dollars to fund some areas of government that comply with state mandates, such as the social services, the argument can be made that funding should be released to counties even when a budget hadn't been reached.

"A lot of the things counties do, such as Children, Youth (and Families), can be considered essential," he said.

— Reach Greg Gross at ggross@yorkdispatch.com.