The Dukes County treasurer warned this week that with revenue from the registry of deeds sharply down from last year, county department heads will be required to cut their budgets both during the current fiscal year and the following year as well.

“Considering the state of the economy, I don’t think it’s a surprise we aren’t meeting our revenue,” said county treasurer Noreen Mavro Flanders on Wednesday during a meeting of the county advisory board, which controls county spending. “We’re down quite a bit from last year,” the treasurer said.

Ms. Mavro Flanders said that at the end of last month, only 28 per cent of projected revenue for the current fiscal year from both registry and land court fees had been collected. By this time last year the country had collected 42 per cent of its projected annual revenues from the registry of deeds.

Last year revenue generated from registry and land court fees accounted for about 21 per cent of the $5.94 million county budget. Most of the remaining balance came from annual assessments paid by the seven towns in the county. Town assessments are calculated using state cherry sheet numbers, which are usually not released until early January.

The county budget is limited by the provisions of Proposition 2 and 1/2, the state law which limits the annual increase in a community’s tax levy to 2.5 per cent. The budget is also funded, among other things, through state aid, deeds excise taxes and money from the sale of Cape and Islands license plates.

Ms. Mavro Flanders told the county advisory board, which includes one selectman from each town, that the financial crunch prompted her to tell department heads last week they must reduce their spending for the remainder of the fiscal year by 10 to 15 per cent.

“I told them don’t buy anything they don’t absolutely need,” she said.

After the meeting Ms. Mavro Flanders said she will ask department heads to also cut spending 10 to 15 per cent next year.

Ms. Mavro Flanders had more bad news on Wednesday. Five months into the fiscal year, which began July 1, the state has not paid any rent on the Edgartown courthouse, she said. Normally the state pays rent once during each quarter, although sometimes when money is tight the payments come in a lump sum at the end of the fiscal year.

“The state is holding onto money right now as long as possible to improve their own cash flow,” Ms. Mavro Flanders said.

She said revenue generated through the sale of the Cape and Islands license plates has also been late to arrive in the county coffers.

In response to the shortfall and the foundering economy, Ms. Mavro Flanders recommended changing the health insurance payment arrangement for county employees. Currently the county pays 90 per cent of health insurance costs while employees pay the remaining 10 per cent.

There have been discussions in recent years about changing the ratio to 75-25 per cent, which is common in the private work sector.

Ms. Mavro Flanders said it may be time to ask the employees to pay more.

“If we were to move forward with a plan, my suggestion would be to ask only active employees to pay more. I think it would be unconscionable to ask that of our retired employees,” she said.

She suggested any change might be made incrementally, with employees paying an additional 5 per cent each year for several years. The decision is up to the county advisory board.

She said she plans to complete a draft county budget for the next fiscal year in the coming weeks.

A reduced revenue stream may be just one obstacle to crafting a balanced budget this year. In previous years the county has dipped into its reserve fund to offset budget shortfalls. But with the reserve fund balance now hovering around $117,000, county auditors have strongly warned against using the fund to balance the budget this year.

“I’ve been saying we shouldn’t be doing that for years,” said county advisory board member and Edgartown selectman Art Smadback.

The advisory board is expected to review the draft budget at its next meeting in January.