KNOTT COUNTY, Ky. (WYMT) - Knott County is facing a more than $900,000 deficit, and Thursday night, officials came together to discuss their options.
With a deadline looming, a committee discussed how to balance Knott County's budget, before the state takes action.
Thursday night's discussion led to three possible budget plans that will be presented to the fiscal court for approval.
The first is a combination of budgetary cuts, layoffs and a revenue plan that will make up the 9-hundred thousand dollar deficit, as well as provide additional revenue through an occupational tax.
The second is the same combination of cuts and layoffs but without a revenue plan.
The third is a total shutdown of county government, which will leave only state mandated offices up and running.
Some of the magistrates and community members that attended say that no matter what plan is proposed, the best option for the county is new leadership.
“A lot of the spending it's been at the judge's discretion and the reason that we're in this shape,” said District 4 Magistrate, Calvin Waddles.
The County has until February 6th to come up with a balanced budget plan, but many are remaining hopeful.
“Hopefully we'll come up with a solution that can work with everybody the best we can, so that we don't have to have layoffs,” said District 1 Magistrate, Jamie Mosley.
Without that solution, members of the fiscal court could be held in contempt of court and face possible jail time.
We obviously could not get reaction from Judge Executive Randy Thompson because he is in prison.
The budget committee is expected to meet again Friday to possibly vote on a final budget plan.
Previous Story updated by Tanner Hesterberg January, 24th 2013 at 6:00p.m.
HINDMAN, Ky. (WYMT) - Knott County government officials are being forced to make some big budgetary changes in the wake of a $934,000 shortfall.
"The people of the county deserve better services than what we've been giving them the last three or four months," said Deputy Judge Executive Greg Mullins. "We're basically down to a skeleton government."
The state has taken notice of the county's financial woes.
"If our budget is not balanced by June 30 (end of fiscal year), then the legal staff with the Department of Local Government has advised me and the fiscal court that legal action would be taken," Mullins said.
State officials have told the Knott County fiscal court they want to see some sort of financial plan submitted to them by Feb. 6.
"We're not expecting them to have a balanced budget in two weeks," said Andrew Hartley with the Department for Local Government. "We're expecting them to have a plan for how they will get there. Their situation is pretty immediate because they're having trouble paying their bills."
Hartley and three others from the department visited Tuesday's fiscal court meeting in Knott County and made some financial recommendations.
A decline in coal severance funds was a big reason why the county lost $1.2 million in the first two quarters of this fiscal year. In order to make up for deficit, the fiscal court may have to approve a new revenue stream - like an occupational tax - in addition to spending cuts.
"We are not there to mandate that they either put on a tax or that they make cuts," Hartley said. "But they do have to have a balanced budget and we have the authority to compel compliance with that budget law through an action in Knott County Circuit Court."
If that happens, the fiscal court would be forced to pass a balanced budget at the risk of facing contempt of court and jail time.
The Knott County Budget Committee is having meetings Thursday and Friday at 5 p.m. to discuss the situation and seek public comment.