Economic Study

Clinton County ordered a review of its financial situation in early 2019 by independent, third-party accounting firm Baker Tilly. Baker Tilly is not affiliated with E.ON or the Clinton County Wind project, and we did not pay for any portion of the report. You can download the entire report at the links provided and read a summary provided below.

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Clinton County Economic Study Summary

Indiana bills itself as the “Crossroads of America.” Today, Clinton County finds itself at its own crucial economic crossroads. There are two starkly different directions that the county could take in the coming years. One option is to continue business-as-usual and continue on a path toward million-dollar deficits. This could lead to scaled-back services, higher taxes, and more out-of-pocket expenses for county residents. Or, Clinton County could choose to embark on a new path – a prosperous and sustainable future that includes new revenues to close the budget gap, avoids tax increases to county residents, creates an influx of economic development, and helps fund critical services for residents.

Without a change, it appears the county is headed for a rocky fiscal future. The only question is what change will the county make; raise residents’ taxes, cut services, or be open for business?

 

Professional financial analysis:

The independent report, requested by Clinton County and prepared by accounting firm Baker Tilly, finds that the county’s assessed value is decreasing, expenses are increasing, and that without a plan to address its financial difficulties, the county is headed for even more problems.

The findings are stark. By 2023, Clinton County will be operating with less money than it did in 2013 – in real, non-inflation dollars. In just two and a half years, if it continues business as usual, the county will face a nearly $500,000 deficit, climbing to $1.1 million by 2023.

(Image from P.6, BakerTilly “Comprehensive Financial Plan (2017-2023) Clinton County, Indiana”, edited)

The report paints a grim financial picture. Moreover, this will not be limited to red ink on the county’s balance sheets; it has real-life implications. It will likely mean cuts to programs that we need the most – such as funding for health care and first responders.

 

Real data, real pain for Clinton County:

The report also finds that:

  • The hospital contractual budget will include $2 million in unfunded, annual expenditures through 2023.
  • Clinton County will need to find a new source of funding for its EMS. The hospital contractual fund currently pays for EMS; however, by 2022, this fund will be phased out.
  • Combined health services cash balances will be in debt $71,000 by 2023.
  • Public Safety LIT will run deficits from 2019 to 2023, with its total cash balance in the red by 2023.
  • The county health program begins to run a deficit this year – with the red ink continuing into 2023.
  • The county’s fund to inspect and repair local bridges has run deficits for three straight years, registering a deficit of nearly $400,000 in 2019.
  • The county’s rainy-day fund was already $140,000 in the red in 2018 and is projected to get worse in the future.
  • The landfill tipping fee will run a deficit of more than $21,000 in 2022 – a figure that more than doubles to $46,000 in 2023.

 

Increase Taxes?

The report finds that Clinton County residents already face a higher property tax burden than their neighbors in seven of the eight surrounding counties. Even with those higher taxes, there is always one option the county could turn to: raising taxes even more. The report points out three new, potential taxes – totaling $3.5 million by 2023 – the county could put in place (subject to all necessary public approvals) to cover the budget shortfall. Nobody wants higher taxes.

 

Shuffle Money and Cut Services?

The report also suggests another option the county could pursue to try to close its budget gap: shuffling money between budget accounts. By shifting appropriations between accounts from year to year, the report finds the county could partially close its immediate budget gap. Doing this likely means cutting current budgets and services where the monies were originally intended to go.

 

Be Open for Business?

Fortunately, there is a way out of this crisis that doesn’t involve raising taxes or cutting services. As the Baker Tilly report points out, just by approving a proposed wind energy project, Clinton County could turn its $1.1 million general fund deficit into a $2.5 million surplus by 2023.

(Image P.6, BakerTilly “Comprehensive Financial Plan (2017-2023) Clinton County, Indiana”)

A wind project would infuse the county with badly needed revenue without increasing taxes or cutting services. In fact, with the additional revenue, the county could provide even more and better services. Also, lease payments from the project would put money back in the pockets of local residents, which would be reinvested in the community.

The report, while dire, is not just a forecast of a bleak financial future. It is a roadmap of where the county should go to address this problem.

The clock is ticking. To avoid the deficit explosion, Clinton’s three county commissioners – Steve Woods, President Josh Uitts and Scott Shoemaker – need to act now.

In the short term, they must lift the county’s current moratorium on considering wind energy. The moratorium keeps Clinton County closed for business, and, as the Baker Tilly report confirms, only helps entrench the looming fiscal issues by preventing open debate about what a wind-energy project would mean for Clinton County and its financial future.

The County asked for this report. Now, the County needs to seriously consider the report’s conclusions: the proposed wind energy project from E.ON represents the best option to avoid deficits and higher taxes, and help build a brighter economic and fiscal future for the county and all its residents.