Benton County presents balanced 2025–27 budget after $15.1M in cuts; officials flag PERS and reserves

County Administrator Rachel McEnany and Assistant County Administrator Rick Krager presented the Benton County proposed 2025–27 budget, saying the county began the process with a substantial current-service-level increase driven by higher labor costs, benefit increases and other structural pressures.

Krager told the committee that the county’s calculated current service-level costs rose roughly 32.2% in some funds driven largely by personal services increases and by one-time implementation decisions in the prior biennium. He cited PERS employer-rate increases as a major long-term driver: the county’s PERS rate had risen substantially and, as presented, the purchase cost was about 56% higher for the next biennium — a figure Krager said equated to nearly $12 million in additional costs across affected funds.

McEnany summarized the administration’s approach to closing the gap that appeared when current service-level estimates were compared with available revenues. The initial shortfall on the general fund was presented as roughly $11.9 million. County staff identified roughly $2.3 million of internal service reserves and interest earnings that could be used one time and developed $15.1 million of proposed budget reductions (about $10.8 million of those reductions were on the general-fund side). Key budget actions included:

- A temporary freeze on nonrepresented/management cost-of-living adjustments (savings described as roughly $3.4 million total funds; about $1.8 million general fund). - Use of internal-service and insurance reserves and one-time ARPA interest earnings (roughly $2.3 million identified). - Vacancy-factor adjustments and selective position eliminations or freezes (the administration highlighted 11.35 FTE eliminations or freezes as part of the package). - Reductions in planned general-fund transfers to some programs, including a reduction to the transfer that had previously supported the community health centers. - Rightsizing and potential monetization of excess facilities to produce about $6 million of one-time resources to rebuild reserves.

McEnany and Krager said the package results in a balanced proposed budget for 2025–27 and a projected general-fund reserve ratio of about 10.5% of operating expenses (the administration noted 12% is a commonly cited best practice target). They repeatedly warned that the solution relies in part on one-time resources and that, without additional structural revenue or policy changes, the county faces downward pressure on reserves in 2027–29.

Other details presented to the committee included:

- Health-insurance and dental costs were projected to rise 10–15%. - The county had added about 29 positions in the current-service-level estimate to operationalize the new Benton County crisis center; staff said those positions are intended to be funded by behavioral-health revenue streams rather than general-fund dollars. - The county moved health-related contracts and grants into a new separate health fund to make the general fund more transparent.

Committee members asked for more detail about the vacancy-factor methodology and about the PERS drivers; staff said additional actuarial and policy analysis will be needed and described plans to seek deeper review and regional coordination. Several commissioners and committee members urged caution on any future tax increases and emphasized exploring administrative efficiencies, rightsizing facilities and other structural options.

McEnany closed by saying the budget is balanced for the next biennium but that “we still have work to do” to address structural issues — and she urged the committee and the Board of Commissioners to treat the proposal as the start of a multi-step effort to stabilize long-term fiscal health.