GLASGOW – Barren County Fiscal Court and Barren County Health Department leaders are anticipated to take a much closer look at funding for the agency and the services it provides in the next few months.
Jeffrey Howard, commissioner of the Kentucky Department for Public Health, according to a Kentucky Health News report, said this week if there is no relief from the added pension contribution health departments are expected to make in the coming year and if everything else stays the same, 42 health departments would have to close in the next 12 months and 22 more would run out of reserves and be forced to close within the following 12 months.
Those first 42 counties would include Barren and all the others in the Barren River District Health Department coverage area except Warren, and it would be in the latter 22.
He called for the legislature to grant that relief on the pension contribution, but he is also calling for health departments to do community assessments that take a detailed look at all the services they provide and evaluate their level of necessity and the extent to which it is necessary that the health department provide them rather than some other agency or organization, according to the report from Kentucky Health News, which is an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Media at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.
Health departments' pension obligation is set to jump from 49.47 percent to 83.43 percent for the fiscal year that begins July 1, according to the KHN report.
State and local agencies that are part of the state's pension programs have been awaiting word of a special legislative session Gov. Matt Bevin intended to call to address the pension contribution levels and other matters relating to the programs, but that's still pending.
Howard wants to scale back to core areas of service either way, and if a program is not financially viable or statutorily required, it will have to go.
In the meantime, with higher payments toward pensions to compensate for years of the state underfunding them, counties will have to examine their financial approaches to funding the costs associated with providing services, including the escalating pension price.
Barren County Judge-Executive Micheal Hale said Barren is one of three counties in the eight-county BRDHD service area that does not have a separate taxing district to finance the budgetary needs of the health department not covered by other revenues. Without that, the county is financially responsible for the funding from its General Fund.
The current fiscal year's budgeted contribution of $578,158, usually paid in quarterly installments, is the same amount allocated in the proposed budget for the fiscal year ending June 30, 2020, but the lack of increase there was partially due to the uncertainty over how much would be needed for the pensions. The fiscal court has approved the first reading of that budget 7-1, but approval of a second reading is still necessary.
Hale told the Glasgow Daily Times on Friday that he had learned after the first reading occurred that BRDHD's board of health was asking for a 2.25 percent increase for the county's contribution, so a budget amendment is likely to be needed either way.
He said that's the contribution the county makes that has grown the most since he took office, when the contribution was in the neighborhood of $300,000.
County governments have been allowed to increase the pension obligation contribution in increments over the course of a few years, but the health departments' jump is happening all at once, as it stands now. If that doesn't change, Hale said, the calculations he and the county treasurer have made could put the county's contribution at well over $1 million, which he said would be “catastrophic” for the county's budget as well.
Hale said that whether the pension contribution increase hits all at once or over five years, it's going to add a large chunk to costs.
During one of the Administrative and Budget Committee meetings leading to the development of the proposed budget, Hale spoke about the fact that more revenue – or a distinct revenue source – may be needed to cover these rising pension costs. On Friday, he said he intends, after the second reading for this proposed budget goes through, to ask that committee to start taking a closer look at the possibility of a health department taxing district, which could tax real and personal property and/or an occupational tax for the county, which Magistrate Carl Dickerson has raised again lately as a possibility for increasing the General Fund revenue, though he has generally been opposed to tax rate increases.
Hale said of the taxing district option, however, “I just think that's the only fair way to take care of the funding mechanism for the health department.”
Hale said he hadn't seen the KHN report, but he hasn't heard at any meetings he's attended of the county or district boards of health anything to indicate the health department here would only have one year of solvency without the change, particularly as the county is responsible for making up deficits. He added that he has not made it to all of the recent meetings of those boards, though.
Jeff Botts, who chairs the Administrative and Budget Committee but is new to the fiscal court this year, said Friday he truly couldn't say which approach(es) he thinks would be best without gathering more information on the services the health department provides – although he knows that some absolutely cannot be cut – and the latest on the pension requirements.
The Daily Times also tried to reach the other two members of that committee and Dickerson late Friday afternoon but did not immediately hear back from them. An early afternoon call and email to Matt Hunt, who has been the district director for BRDHD for only a few months, went unanswered into the evening, as did a voicemail at BRDHD requesting a copy of its and Barren County Health Department's budgets for fiscal years 2018-19 and 2019-20.
-- NOTE: This report has been edited since its original publication to provide the correct vote count on the Barren County Fiscal Court's first reading of the budget ordinance for the 2019-20 fiscal year.