Centre County may be required to tap into its reserve funds, increase taxes or slash funding for county-run programs because it is "substantially over budget," County Administrator Tim Boyde said.

County Commissioner Jon Eich said there are often higher projected expenditures than projected revenues at this point in the budget process.

"Whenever the budget is first compiled, we have expenditures that are higher than revenues," Eich said. "I would guess that we're going to use some reserve funds, but I don't know how much."

Eich said a draft of the about $84 million budget should be available for public review next month.

County Finance Director Denise Elbell is conducting "budget management" in an attempt to separate "wants" and "needs" of different county departments, Eich added.

Eich expects he and his fellow county commissioners will finalize the budget management process with Elbell by the end of next week.

The disconnect between projected expenditures and projected revenues is partially related to the economic turmoil facing the nation, Boyde said, adding the increased renewal price for county employees' healthcare benefits will lead to a 10 percent increase in costs this year.

Interest income, a form of county revenue similar to investments, will be "substantially less" than the $1 million generated in 2007 and the $500,000 to $600,000 generated in 2008, Boyde said.

Other traditional sources of county revenue have also fallen short of projected goals.

Boyde said Centre County rents available bed space annually at the county prison to other counties who require prison housing for their residents. Last year, the county collected $250,000 from this practice, but Boyde expects the county to obtain just $100,000 this year -- "if we're lucky."

State law says the budget must be available for public review for at least 20 days before going into effect Jan. 1, 2009.

Though Boyde said the county had $8 million in reserve funding as of Jan. 7, only some of the funds may be allocated toward lessening the budget imbalance.

"We're required by internal policies to maintain a fund balance of $4.5 million in reserves, so you can deal with your day-to-day costs in the event that the federal or state reimbursements were slow in coming to us," he said.

This practice allows the county to avoid requesting a tax anticipation note -- a short-term loan taken by a municipality in anticipation of future revenue collection.

Centre County must now grapple with how to generate the revenue needed to balance the budget by December, Boyde said.

"There's a stated commitment to not increase taxes," Boyde said.

Eich confirmed neither he nor his two fellow county commissioners plan to raise taxes.

Boyde said the dilemma lies in deciding which programs merit reduced funding.

"What is the benefit to the county? Can we make a meaningful reduction in services without jeopardizing life safety issues?" he said. "It's a balancing act."