A blueprint to fix fiscal crisis

Published 9:53 am Wednesday, April 25, 2012

by Dan Hohman

As a 17-year resident of Southampton County, I would like to try to put in perspective what we as non-government working-class people and retirees are facing in the current recessive economy.

I for one have been retired for 17 years, and with the exception of a few minor cost-of-living Social Security adjustments, have not received any increase in retirement income throughout that period.

I have, however, been subjected to significant increases in my real estate and personal property taxes and state and county fees. I have experienced tremendous increases in medical and prescription drug insurance, and vision and hearing costs.

However, that pales by comparison to what is about to befall all U.S. citizens effective Jan. 1, 2013, in the form of additional federal and state tax increases, and medical cost for laws already on the books. It is calculated that the average middle- and lower-income individual will be required to pay an additional $3,200 to $3,600 in taxes alone.

In the county, in spite of everyone knowing that real estate has lost significant value, based on the tremendous increase in property values resulting from the reassessment, our taxes for property will again go up over the 1-cent imposed on us by this board for this fiscal year.

All of this, plus the significant increases in inflation for the cost of food and automobile operating costs, means just one thing: I will not be able to meet my cost-of-living expenses in Southampton County from my current retirement income.

Also, in a community with more than 11 percent unemployment and approximately 30 percent of the employed persons working part time, I am confident that I am not alone.

So how did we get here and what is the solution?

We got here based on previous members of the Board of Supervisors accepting the request by the various functions of the county forever increasing numbers of employees, salaries and benefits, and facilities and programs without reconciling whether we could afford them.

So we consistently raised taxes, and those organizations and those employees, I suspect, feel pretty comfortable that that will happen again.

However, across the world and country, there is recognition that we can no longer support the “ask-and-you-shall-receive” method of government.

The examples of this range from states like Wisconsin to counties in bankruptcy in many states.

So what is the solution?

First, we stop thinking like a government organization and start thinking like a family or a business that experiences a severe change in its revenue-generating capability.

In the real world of Southampton County, we immediately take the following actions:

• Impose a freeze on all hiring, and require that those positions that require a specific skill not available in the current workforce, be filled only after the department manager prepare and submit a position requirement analysis to the Board of Supervisors for its review and approval.

• Institute immediately the state retirement program recommendation that employees pay 5 percent of their retirement cost with the county paying 11.28 percent instead of the county paying 16.28 percent.

For a person making $40,000 a year, this would amount to $2,000 annually, or $38.46 per week. Calculate this savings plus eliminate all life insurance worth 1.11 percent, plus eliminate all paid, but not used sick days compensation, plus consider some responsibility for the approximately $1,000 monthly health care family plan cost provided at no cost to employees.

Considering only the 5 percent and 1.11 percent, we could achieve nearly $2 million in savings at average income levels at $40,000 per year. All of these benefits have long since been severely reduced or eliminated in private enterprise.

If this does not eliminate the shortfall in the current budget, send the balance required evenly distributed to every county organization for their consideration and require a plan to meet the shortfall. This could include rescinding the recent 2 percent salary increase for all county employees, which was funded by the 1-cent property tax increase.

• Take immediate steps required to restructure the county school board, who answers to no one and who makes considerable decisions unilaterally.

The most recent example is the hiring of the replacement superintendent with the compensation package offered, which is the same as the retiring superintendent, who worked 15 or more years to achieve and was based on his observed performance.

The new superintendent has no observed performance in our county. Establish a Board of Supervisors member to be a representative on the school board with compensation. Establish term limits for all school board members and take the steps necessary to implement an open elective school board process.

This is the action and mindset necessary to make the kind of cost reductions required of a balanced budget. It is also the actions felt by the citizens to be necessary and the reason for the election of the four new members of the Board of Supervisors.

DAN HOHMAN lives in the Berlin-Ivor District and is a retired human resource manager for Ford Motor Co. in Norfolk and Detroit. He can be reached at 859-6855.