ST. JOSEPH COUNTY — Passage of St. Joseph County's local option income tax hike last month cut next year's projected $10 million dollar budget deficit by more than half. But, county leaders say that doesn't mean their budget battles are over. Now, they must decide where to cut all over again.

County leaders have met with department heads all week, combing through their budgets line by line. Thursday, they met with four more departments to help decide where cuts might be made.

The county still faces a project $3 to $4 million shortfall in 2010, depending on how much revenue is actually raised from the new income tax.

The big question is where to make up that money?

Some departments say they've already had up to 20% of their budgets cut out over the last two years. Some say slicing any more out could be catastrophic to their operations.

St. Joseph County Sheriff Frank Canarecci was one of them, telling County Councilmen, Commissioners and the County Auditor on Thursday that further cuts are not realistic.

"In our business, while it is important to be efficient, it is also very important to be effective," he told the assembled group during the budget hearing. "What we really need are additional personnel, not fewer. I'm not asking for that, but I really don't see how we can safely and securely be any more efficient."

It's been the rally cry from department after department all week long. Budget hearings Monday and Tuesday featured departments from the County Clerk's office to the County Health Department. Nearly all have seen drastic budget reductions over the last several years.

Canarecci said his department has cut 27 positions over the last three years, including 15 sworn officers. Cutting more, he said, would only mean one thing.

"It would mean decisions that would endanger that public, endanger my officers, endanger the inmates. Because, what do you do? Take officers off the streets? We know we're going to have 50,000 calls for service, 12,000 accidents to cover, 6,000 alarms to answer. Our costs aren't going away," Canarecci said.

That's why Canarecci is asking for a funding increase of $250,000 for the County Police budget, pushing the total to nearly $9 million for next year. The County Jail budget would see approximately $100,000 in cuts, totaling approximately $6.3 million for next year.

"That's primarily the result of the requirements through the funding of pensions. Tremendous economic downturn has caused tremendous loss. Our pension fund, fortunately, has had minimal losses. And, we've recouped much of those losses. But, you kind of prepare for a worst case scenario," Canarecci said.

Juvenile Justice Center administrator and Probate Court Judge Peter Nemeth is preparing too, submitting a budget nearly identical to last year's — that keeps cuts implemented over the last two years intact.

"We have cut about 20% over the last two years," he said.

But, the JJC/Probate Court budget does include some increases in the form of pay raises for eight of his employees — issued earlier this year despite the County Council's objection.

Nemeth called the Council's "refusal to permit raises, unjust, unfair and discriminatory" at the time. Under Indiana law, judges can "mandate" the amount of money they need to "operate their courts sufficiently." But, ultimately, their budgets are set by the County Council, and approved by County Commissioners.

Nemeth's judicial mandate would change that; boosting Probate Court employees' pay by a total of $60,208. Including fringe benefit costs, Nemeth estimates the total cost to be around $79,000.

The County Council refused to adhere to the mandate, and the matter will go before a specially appointed judge next month.

Nemeth says even if he loses, he won't cut.

"I don't think that's going to happen. But, if it does, I'll have to take another look and determine what to do. Obviously, it's a new budget year. Might have to try a different approach. Might have to issue another mandate," Nemeth said.

And, if he's asked to make additional cuts in that case?

"It would be virtually impossible to do without shutting things down," Nemeth said.

But, some county leaders say asking for an increased budget is unrealistic, too.

"It's realistic that they'll ask for them. It's not realistic that they'll get them," said County Auditor Peter Mullen (D). "The passing of the LOIT last month does take a tremendous amount of pressure off the Council. But, [it doesn't solve everything.] It doesn't solve it."

Even so, there could be other solutions.

The County's rainy day fund currently has $3.7 million dollars in it, and the County Economic Development Income Tax Fund (CEDIT) has an $8.6 million balance. That's money that could be used to help offset losses in the 2010 budget.

But, Mullen says it's not realistic to think that money can wipe out all the county's lost revenue.

"That's not sustained revenue. We have to make some cuts. I prefer to make those cuts rather than taking more out of the reserve," he said.

"From our perspective, that's a band-aid approach," agreed County Council President Rafael Morton (D). "You never know how much the funds will be from rainy day and CEDIT from year to year."

Even so, county leaders are taking a different approach this year, combing through the budget line by line, instead of mandating percentage based cuts from each department.

"Before, we were asking for the same amount of cuts from a percentage standpoint from each department. And, in further discussion with the Council and Commissioners, we realized that each and every department has different circumstances. And, it's obviously harder for some departments to come up with substantial decreases," said Morton.

Even after this week's debate, the question remains: where might the cuts come from?

Morton says only one thing is clear.

"We still have a long way to go," he said.

And not a lot of time to get there.

The county will hear from eight more departments, including the County Prosecutor's office, on Monday. A public hearing on the budget is scheduled for Tuesday night. After that, County leaders will have just 60 days to finalize what funding goes where before submitting the final plan for state approval.