ALLENTOWN, Pa.— Lehigh County would lose millions of dollars next year if County Commissioners approve the 2025 budget as first proposed.
The commissioners' Finance Committee kicked off 2025 budget season Monday at the Government Center in downtown Allentown.
County Chief Fiscal Officer Tim Reeves gave commissioners what he called a “big-picture analysis” of the county’s outlook for next year, and several years beyond that.
Executive Phil Armstrong is proposing a total 2025 budget of $534 million, which includes a $145 million operating budget.
“(It’s) a little bit of a worse five-year forecast than we’ve seen."Tim Reeves, Lehigh County's chief fiscal officer
Salaries for more than 2,000 employees are budgeted to account for just more than half of all spending from the operating budget in 2025, Reeves’ projections show.
The operating budget includes services and programs paid for by taxes and other revenues, while the majority of the other money is much more restricted or “passthrough” funds, Reeves said.
Lehigh County’s overall budget also includes a $25 million stabilization fund. The county aims to keep that much money in the fund, which it uses to maintain its cash flow and pay bills between tax collections.
Reeves’ projections show the county should finish 2024 with $30.3 million. Officials plan to use that $5.3 million surplus to offset a loss of the same amount in 2025.
The county’s projected $5.3 million loss next year is fueled by bigger spending on insurance and the Office of Children and Youth Services, along with “state-mandated” reduced revenues from the county jail, Reeves said.
'Inadequate for budget this size'
Under Armstrong’s 2025 proposal, county Children and Youth Services would get $2.3 million more than in 2024, with an extra $2 million for insurance coverage and $900,000 less from the Lehigh County Jail.
Though Lehigh County’s projected loss in 2025 would be covered, its outlook beyond is not as certain, according to Reeves’ projections.
“We’re at a tipping point with how we move forward."Lehigh County Commissioner Jeffrey Dutt
His prior reports to commissioners showed Lehigh County was set to break even for the next few years.
But increased spending in the proposed 2025 budget would be maintained in coming years and cause Lehigh County to lose a further $5 million each year from 2026-28 if commissioners don’t act to raise taxes or cut costs before then.
Officials would be forced to dip into the county’s stabilization fund, cutting it to $10 million by the start of 2029.
That total would be “woefully inadequate for a budget of this size,” Reeves told commissioners.
It's “a little bit of a worse five-year forecast than we’ve seen,” he said.
Commissioner Jeffrey Dutt also noted the board must decide whether to continue funding programs and services that have been propped up by pandemic-relief money from the American Rescue Plan Act. That money soon will run out.
“We’re at a tipping point with how we move forward,” Dutt said.
But Armstrong on Monday said the county’s fiscal outlook is “not all gloom and doom.”
He said he was hopeful of soon sharing good news about the county’s negotiations over its insurance and potential new funding.
