ELIZABETHTOWN A mere mention of the upcoming Essex County budget at an Oct. 20 Finance committee meeting sparked a debate on how best to manage fiscal resources and highlighted major dilemmas in the perceived need to cut spending. Even though a formal budget has yet to be set forth, County Manager Dan Palmer summarized his initial assessment of the countys needs. Currently were at last years level, said Palmer. Theres been no increase in the tax levy. Palmer went on to explain that intergovernmental transfer (IGT) funding has played a major role in allowing the county to meet its increasing spending commitments while keeping property taxes stagnant. But that funding is not likely to return in the next fiscal year. As a result, Palmer said, the county will likely have to plan on setting aside as much as $6.4 million out of its current fund balance, which is estimated to be in the $18-19 million range, if property tax and estimated spending levels remain the same next year. Essex Supervisor Ron Jackson suggested that a slight increase in property taxes might be a better way to prevent the need for a larger tax hike in the future, assuming such a trend would continue after 2009. Several other board members entertained the idea. We should always be trying to find other ways to bring in revenue other than real property tax, said Moriah Supervisor Tom Scozzafava. Another big part of the formula here is we have to find ways to reduce expenses, too, and we have. Scozzafava pointed out that county employees represent the bulk of the county budget and that finding ways to reduce the number of staff might be necessary. I think $13 million dollars, if that is what we are left with in January, is still a healthy fund balance. said Scozzafava. Palmer pointed to the Horace Nye nursing home as one of the countys biggest user of funds. Recent cuts at the state level for the program are placing an even larger burden on the county to keep it running. You will have to address the issue of Horace Nye, said Palmer, suggesting that some restructuring of the program may be necessary. Some board members have proposed privatizing the facility to keep it running as a nursing home. Theres going to be a lot of hard choices were going to have to make here, said Scozzafava.