Lycoming County Commissioners via YouTube

There’s good and bad news for the county as the commissioners unveiled Lycoming County’s proposed 2026 budget this week. The good news is that the $123,254,342 proposed budget is balanced with no funds being drawn from the fund balance to make up the deficit. The bad news is that there is a proposed 0.5 mill tax increase and additionally, budgetary cuts were necessary in order to arrive at that balanced figure.

For taxpayers, the half-mill increase is equivalent to an additional $50 per $100,000 of a property’s assessed value. The commissioners pointed out that this was the first tax increase the county has had since 2018.

“The preparation of the 2026 budget has been exceptionally stressful and challenging as a result of the state budget impasse, as well as the federal government shutdown. Both have drastically delayed reimbursements and revenue streams that Lycoming County relies on heavily to operate efficiently,” said Mya Toon, director of financial management for the county.. “These external factors have also compounded our internal fiscal challenges. Internally, the county continues to face the burden of rising healthcare costs, essential service demands and pressure to address long term capital needs with limited revenue on financial resources,” she added.

According to Toon, health care costs have increased by approximately $4.63 million; juvenile probation services have increased by an additional $2.68 million; and the landfill also continues to financially struggle

“Many years of drawing from the fund balance to cover operational gaps, rather than securing bonds or sustainable revenue solutions for capital projects, has left the county in a very vulnerable financial position,” Toon said.

“For several years, these types of critical financial issues have not been adequately addressed, and as a result, we are now facing significant budgetary cash flow pressures that require immediate and responsible action. Despite our ongoing efforts to control spending, streamline operations and identify new sources of revenue, the structural imbalance between expenses and revenue growth remains a concern. To maintain essential services and long term fiscal health, the county has made very difficult but necessary budget decisions,” she said.

Some of those decisions involved tightening departmental budget, reducing discretionary spending and carefully managing the county’s fund balance.

A fund balance is the amount of money that the state suggests the county have in reserve to cover operating costs, ideally for three months..

“When the preliminary 2026 budget was first submitted to financial management for review, it reflected a structural deficit of approximately $23 million. Through an exhaustive due diligence process, financial management was able to produce a balanced budget for 2026 without relying on fund balance for the first time in several years. Unfortunately, our costs still continue to outpace revenue growth at this time, the only responsible action is to implement a half mill tax increase to maintain fiscal stability,” Toon said.

Taxes account for the largest revenue source for the county, at about 35 percent of the total.

Commissioner Scott Metzger explained that part of formulating the budget was to the various department heads to have them suggest cuts to their programs.

“We want to thank them, the employees, for understanding and working with us. No one wants to ever raise taxes, but the reality is, at some point you have due to rising costs,” Metzger said.

He noted that there have only been two tax increases at the county level since 2004, adding that the county has been “very limited in their tax increases over the years.”

“This has been very stressful because we know it affects everyone’s life, and we spent a lot of hours making decisions on what to cut. We have basically cut $28 million out of the budget over the last two years. That’s substantial, and yet we still have to raise the taxes in order to replenish that fund balance,” Metzger said.

“That fund balance is critical to make sure that things get paid and get paid on time,” he added. Commissioner Marc Sortman stressed the importance of not using the fund balance to make up for budget deficits, something that had been done for many years.

“We did not touch the fund balance – that’s our savings account,” Sortman said.

He pointed out that the county will probably need to put $500,000 a year into the fund balance to get it back to a $20 million level. It is estimated, he said, that there is about $10 million currently in the fund balance.

“While the three of us sit here together, we will never have the use of the fund balance to balance our budget,” Sortman said.

Sortman was also critical of another practice, which had been used to provide funds at the end of the year in the past, the TRANS (Tax and Revenue Anticipation Notes), which is essentially a loan to cover expenses until tax revenues come in the spring.

“We’ve had to do it just because the money wasn’t here at the end of the year and we don’t get new income until March,” He explained, adding that the county will need to do that again.

“We are financially secure enough that there is no issue getting a new TRANS and rolling over the previous balance that we had. We don’t want to add to it. We just want to take what we owe this year, pay it off and again, the three of us are committed to not having a TRANS in the future,” he said.

Earlier this year there were questions about the financial stability of the county’s landfill. Sortman stated that during the budget process, it was revealed that there are bonds valued at over $27 million that had been borrowed on the landfill.

“The landfill that I was told for 20 years as a resident is a cash cow. I don’t know how a cash cow owes $27 million,” Sortman said.

“With the amount of land space we have left currently permitted by DEP (state Department of Environmental Protection), we don’t have enough years in business to pay off $27 million worth of debt,” he said.

“That’s a sad situation that the three of us are faced with, and we’re to work on that,” he said.

He did explain that the county can apply for more space.

The county too has bonds totaling $57 million. These have various maturity dates extending from 2030 out to 2040.

“That’s a long time to be paying on this debt. Fortunately the annual payment isn’t huge, but I think it’s part of our responsibility to work at paying them down sooner,” Sortman said.

“My gosh, that’s my son’s generation and maybe my grandchildren’s generation that are going to be paying off a debt that was created before the three of us sat at this table and that’s huge,” he said.

“We’re going to fix these problems. People elected us to fix these problems. It comes with a lot of pain. We’re going to change the face of Lycoming County,” he said.

Sortman pointed out that the commissioners have already been questioning some of the amounts the county is being charged for construction projects. They have also been deleting open positions from the TDA (Table of Distribution and Allowances) in an effort to curb costs.

“We’re going to find out the best way to run a county. We’re not going to be overstaffed. We’re not going to have outside contractors doing work that our own contractors, our own staff can do,” he said.

The proposed budget will now be posted on the county’s website until a final vote is taken on Dec. 18.

Metzger noted that the commissioners will continue to look at the budget to see if there are any other adjustments that can be made.