News Photo by Steve Schulwitz Alpena County Treasurer Kim Ludlow crunches budget numbers on Thursday. Right now, the county is staring at a $1.4 million budget shortfall that could force severe cuts, including layoffs.

ALPENA — Cutting jobs at the courthouse is on the table to lower a projected $1.4 million shortfall the Alpena County Board of Commissioners faces as it readies next year’s budget.

The budget process begins today as commissioners begin to review budget requests from department heads, who have slashed spending for almost a decade and are being asked to do so again to help get finances back on track.

The county has a roughly $10 million annual budget and started the year with more than $4 million in savings, though it has dipped into that fund each of the last three years to cover gaps between income and expenses.

County Treasurer Kim Ludlow said the primary reason the county is so far in the hole is because of the payment requested by the Municipal Employees Retirement System of Michigan, which oversees public employee pension systems throughout the state. MERS says the county should contribute about $1 million to pay down the more than $6 million in long-term retirement debt.

Ludlow said there is no way the county can really afford to allocate $1 million toward the unfunded liability, at least not this year. She added that the state already takes a portion of the revenue sharing it gives the county to put toward the debt, but that only covers about $30,000 to $40,000 a year.

“It is very minimal,” Ludlow said. “They have been asking for $700,000, $800,000 a year and now a million, and we just don’t have it.”

The county also pays about $100,000 a year toward bond debt taken on to help pay for construction at the county airport. She said that financial obligation will be in place for another 18 years.

Ludlow said she can only recommend cuts to the commissioners, and they have the final say. She said most departments in the county are already spread thin in terms of employees, and she is unsure how many more jobs can be slashed before it has a serious impact on operations.

“Our employees are our highest expense, but also our greatest asset,” she said. “My office has gone from a staff of five to three, the Register of Deeds has gone from four to three, Equalizations has gone from five to three, and there are only two people running probate court. There isn’t a lot of room for cuts.”

Commissioner Brenda Fournier said she has been concerned as she has watched the shortfall grow each year she has been on the board. She said some hard choices will be made and all cuts are on the table, even if that means reducing staff.

“We’re going to have to make some very hard cuts, and I hate to say this, but we may have to have some temporary layoffs of staff for a short period of time,” she said. “We can’t do anything about the mandated positions, but we will have to look at what we can do with non-mandated employees. These decisions are not going to be easy, but have to be made.”

County board Chairman Bob Adrian said the county has seen a decline in revenue for years, much of which he attributes a state law, known as a Headlee rollback, that limits what local governments can charge in property taxes. He said the county’s property tax rate has been 5.3 mills — about $265 a year for the owner of a $100,000 house — but, after the rollback is applied, it shrinks to 4.8 mills — about $240 for the owner of a $100,000 house.

He said that equates to a loss of about $600,000 a year. Unlike other communities that have asked voters to approve tax increases to make up for the lost funds, Alpena County has not, and it has paid the price, so to speak.

He said there is also about $500,000 a year of lost property taxes from people who have waivers and are exempt, such as veterans and low-income residents who claim hardship.

“The county has never asked to go back to the full 5.3 mills,” he said. “A lot of other communities have or are because they are so cash-strapped.”

The first of several budget meetings is today at 1 p.m. in the Howard Male Conference Room at the county building, 720 W. Chisholm St.

The budget must be completed before Dec. 31.