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Cherokee County CFO flags slowing SPLOST growth, urges conservative 2026 budgeting
Summary
County CFO presented second-quarter financials on April 15, showing ARPA drawdown, flat revenue outside property taxes, strong pension funding and early signs of slowing SPLOST receipts; staff recommended conservative budgeting and potential use of fund balance if the digest growth is lower than projected.
Cherokee County Chief Financial Officer Marcus reported a largely healthy cash position at an April 15 work session, but warned commissioners that several revenue indicators are flattening and urged caution in the FY2026 budget process.
Marcus said countywide operating cash decreased in the quarter in part because of ARPA spending, adding that "ARPA accounting for $11,600,000 of that decrease." He said the county still had a robust overall cash position of about $188,400,000 and that the general fund cash had increased, principally due to property tax collections.
The presentation highlighted several points commissioners said they found material: SPLOST receipts are $2,800,000 above the budgeted base year for the first nine months but showed only $652,000 (1.3%) growth compared with the same period last year, and March receipts were lower than the prior March. Marcus said that pattern is an early sign of a slowdown and that "the caution flag needs to be coming up." He advised the board to plan conservatively for revenue in the coming budget cycle.
Staff walked commissioners through fund-balance levels for major funds. The general fund ending balance was presented as $69,400,000 (about 5.39 months of operating reserves). The opioid fund had about $1,600,000; the E-911 fund an ending balance of about $3,500,000 (6.25 months); Senior Services had an ending balance of $108,000 and is subsidized by the general fund; Fire reported an ending balance of approximately $10,600,000. Marcus noted some funds are self-sustaining but cautioned that E-911 may exhaust reserves without rate increases.
On expenditures and benefits, Marcus said medical claims were up roughly $1,400,000 versus last year. He also presented pension funding as a point of strength: the pension funding ratio stood at about 83.7% (the highest in roughly 20 years), with roughly $23,000,000 in pension credits and projected pension expense of about $21,000,000 for the year.
Staff also briefed the board on the beginning of the millage and digest process. Marcus said a recent state law change affecting exemptions is complicating the tax digest timeline and estimates; the assessor’s office is working through exemption calculations, which may delay final digest figures and complicate fire‑fund and general fund revenue estimates. Commissioners discussed holding the millage constant for the general fund as they complete budget reviews.
Why this matters: County leaders said slowing SPLOST growth, uncertainty in the tax digest and steady increases in benefit and capital costs mean the board may need to delay hiring, re-evaluate capital timing and rely on fund balance in the short term unless digest results improve.
The CFO said staff will continue meeting with departments and return with more detailed options and recommended reductions during the budget cycle.
