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Cuyahoga County midyear budget update shows general fund and HHS levy shortfalls; officials outline further reductions
Summary
The county's preliminary midyear budget reports a projected 2025 general fund deficit (excluding ARPA) of about $14.7 million and a Health & Human Services levy deficit of $18.9 million; fiscal staff outlined expenditure reductions already taken and said additional measures and a status‑quo projection for 2026–27 will be prepared.
Walter Parfialitz, director of the Cuyahoga County Budget Office, presented a midyear budget update to the County Council Finance and Budgeting Committee that showed operating shortfalls in the general fund and the Health & Human Services (HHS) levy fund.
"The general fund is projected to end 2025 with an operating deficit of $47,300,000," Parfialitz told the committee, clarifying the larger figure includes projected remaining ARPA expenditures; he said the deficit narrows to $14,700,000 if ARPA spending is excluded.
Why it matters: Committee members and staff said persistent deficits threaten the county's reserve requirement and could affect upcoming bond ratings and the 2026–27 biennial budget. The administration and Council discussed additional spending controls, hiring restrictions and the need to include all reasonably anticipated expenses in future budgets.
Key figures and drivers
- General fund: Projected revenues $637.6 million; projected expenditures $684.9 million (including $32.6 million in remaining ARPA expenditures). Excluding ARPA, the projected deficit is $14.7 million. The beginning cash balance was $182.5 million; the projection shows an ending cash balance of $135.0 million, about $9.8 million below the county’s stated cash reserve requirement.
- HHS levy fund: Projected 2025 operating deficit of $18.9 million (projected revenue $281.6 million; projected expenditures and subsidies $300.5 million). Projected ending cash balance $22.1 million, roughly $6.3 million below the levy’s reserve requirement.
- All funds: Projected ending cash balance $682.5 million on a broad basis that includes special revenues and ARPA spending.
Expenditure drivers and departmental variances
Parfialitz highlighted personnel and service variances across departments. Notable items the presentation flagged include:
- The Sheriff's Office: a projected deficit (noted on the slide at about $3.48 million) and committee discussion around a sheriff's office overtime projection the administration referenced at roughly $23 million.
- Juvenile Court: personnel and detention‑officer overtime pressures in the general fund; the juvenile court’s special revenue accounts showed underspending in probation and other areas.
- Health and human services: Children's Services projected deficit of $14.5 million driven by increases in board‑and‑care costs; Job and Family Services projected a $3.9 million deficit tied to added caseworker hiring.
Actions already taken and next steps
Parfialitz said the administration has taken a number of steps, including approved appropriation reductions totaling $12.1 million to reduce the 2025 budget deficit, issuing $41.5 million in notes for preconstruction jail costs, approving $7.7 million in economic development loans and adopting the 2026 alternative tax budget. He also noted the administration identified roughly $6.5 million in hotel renovation spending that will not be paid this year.
The administration plans additional actions to bring the operating funds into balance by year end; Parfialitz listed possible options such as stricter hiring freezes and further non‑personnel budget reductions and said staff will prepare a status‑quo projection for the 2026–27 biennial budget at current service levels.
Council concerns and responses
Council members pressed for realistic budgeting, full inclusion of known expenses in future budgets, and detailed plans to curb sheriff's office overtime. Several members urged timely and transparent planning to restore reserves and cautioned that continuing deficits would affect bond ratings. Parfialitz said rating agencies examine sustainable operating budgets in detail and confirmed the administration intends to submit a balanced 2026–27 budget for both the general fund and the HHS levy.
Ending: Parfialitz said a complete written midyear report with department narratives will be distributed in the next two weeks; Council and administration scheduled further budget planning sessions to identify additional reductions and to prepare for the upcoming biennial budget.
