McHenry Co. looking at $4 million shortfall

With revenues expected to fall by the millions across several key categories, McHenry County leaders are considering a hiring slowdown, reducing employee pay raises, temporarily halting plans to build a county campus and other cost-cutting moves heading into the next fiscal year.

Talk of cuts comes as county budget officials project a nearly $4 million decline next year in previously expanding revenue streams like sales taxes, recording fees, federal grants and building permits. Those same sources are about $2.3 million behind initial projections for the current budget year.

"It's going to be quite a hit to our operations," said Ralph Sarbaugh, associate county administrator for finance.

Overall, the county expects to take in a little more than $100,000 in new money next year, almost entirely the result of additional property tax income.

Officials blame the declines on a slowing economy and, in particular, the slumping housing market that provides the county millions every year through tax transfer stamps, permits and recording fees.

One way the county will look to save is to put a hold on the county campus plan, an ambitious proposal for several new facilities - including a public safety building and a new building for the county health department - adjacent to the county administration center in Woodstock.

"We're acknowledging that the finances don't support that right now," County Administrator Peter Austin said. "We need to bunker down and reassess that as we head into the future."

There are no plans to cut employees, or even institute a full freeze on hiring, but the county will consider slowing the pace of hiring or filling vacant positions, as well as reduce the amount of pay raises next year. In 2008, county workers, on average, received a 4-percent raise.

"We may not be able to afford that," Austin said. "If that's the reality, I expect our employees to understand that."

Overall, officials said, the county remains fiscally strong, with a reserve fund that can cover more than six months of expenses.