Macomb County government remains frugal heading into 2012 and may have established a head start in ridding the budget of a projected $16 million deficit next year.

Though no definitive projections can be made, the latest fourth quarter fiscal reports from 2011 show a flattened trajectory that may indicate good news as the new year progresses.

“You will see the fruits of our labor once more numbers come in,” said Pete Provenzano, county finance director.

The quarterly report, which is now required by the county charter, shows that many departments have kept their salaries and fringe benefits below projections. With hiring freezes and attempts to reduce expenses through employment attrition, rather than layoffs, several departments kept their 2011 payroll costs 10 percent or more below projections.

Those departments include: Probation, Probate Court, Family Court, Finance, Property Equalization, Purchasing, Facilities and Operations, and the Health Department.

Controlling wages and benefits is key to bringing the budget under control because they represent about 70 percent of the county’s expenses.

In 2012, more savings will be realized as the county has secured cost-saving contracts with 23 of the 26 unionized employee units, and a 24th has reached a tentative agreement.

Those concessionary contracts, following in the footsteps of the one-year 2011 pacts, require hiring freezes, pay freezes, higher out-of-pocket health care costs for some employees, a halt to “longevity” payments, and unpaid “furlough days.”

For 2012 the budget is balanced, thanks to $23 million in cuts. The general fund stands at $193 million, a decrease of $6 million, or 3 percent less spending.

The entire budget, including the Department of Roads and all programs financed by state and federal dollars, stands at $614 million.

A huge projected deficit for 2013 looms, largely due to another year of falling property tax revenues caused by the collapsed housing market.

At the same time, Provenzano cautioned that overall expense reports from the departments showing a substantial improvement in cost-cutting for the 2011 fourth quarter are misleading. Many of those figures represent an incomplete final tally for the past year.

Because of the lag time experienced with regard to bills coming in and accrued expenses being recorded, keeping close tabs on spending patterns can be a challenge, Provenzano said.

“A lot of this,” he added, “is more art than science.”

URL: http://www.macombdaily.com/articles/2012/01/27/news/doc4f2224cf86500582189053.prt

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