A day after voters rejected a sales tax hike that would have funded an expansion of the Douglas County Jail and a slate of mental health projects, Douglas County Administrator Craig Weinaug began planning for budget discussions — and the possibility that commissioners would have to fund improvements to the jail by cutting spending elsewhere.

On Tuesday, county voters rejected Proposition 1 and the half-cent sales tax it would have authorized. The tax would have funded the $44 million jail expansion, an $11 million behavioral health campus and $5.1 million in behavioral health programs.

Weinaug said he started meeting Wednesday morning with county staff about preparing a draft 2019 budget for the county commissioners to start considering in June. As in past years, he said he will prepare a “status quo” version of the budget that funds all the programs the county chose to fund in 2018, as well as several alternative plans that distribute the funds differently. The big difference this year, however, is that most of the alternatives to the status quo will suggest places commissioners can cut spending instead of suggesting new projects to fund.

While most alternatives would allow for spending on the jail, the status quo option would not include any funding for jail improvements, Weinaug said.

This year presents a number of budget challenges, Weinaug said. The county will lose $600,000 as the state phases out mortgage registration fees that the county’s Registrar of Deeds Office charges. The county will also face a “substantial” hike in its employee health premium, after a “magic” current year in which it had a nominal increase, he said.

As with all other local jurisdictions, the state’s tax lid law constrains the County Commission’s budget authority, Weinaug said. In most cases, the tax lid limits local jurisdictions from increasing spending beyond the rate of inflation without the approval of voters. Local jurisdictions can take advantage of valuation increases caused by new construction, however, and spending on operational costs for public safety functions is not subject to tax lid constraints. Spending to construct public safety facilities, such as the jail, though is subject to the tax lid law.

Weinaug said he did not yet have a figure of how much space the county would have to increase its mill levy under the tax lid.

The decision before commissioners will be whether and how much they want to cut spending to fund improvements at the county jail or preserve the $1.5 million in additional behavioral health programming approved for this year, Weinaug said. Before making those difficult decisions, commissioners will have the chance to hear community members’ opinions on those issues at a forum scheduled for 6 p.m. May 30 at the Douglas County Courthouse.

What they hear from the public then and in the coming weeks could influence their 2018 budget decisions, Weinaug said.

Commissioners said they are prepared to listen to constituents but are still committed to improving conditions for staff and inmates at the jail.

“We’ll take a few days to catch our breath and listen to what the public has to say,” Commission Chair Nancy Thellman said. “We’ll consider what the options are. We’re not going to jump into anything, but make good decisions that solve ongoing problems.”

Commissioner Mike Gaughan, who announced Wednesday he would not seek another four-year term on the commission, said the aim of the commissions he served on was to solve problems.

“They (Proposition 1 projects) are all important needs and I haven’t crossed any of them off my to-do list,” he said. “How we pay for them is now the question.”

On Tuesday evening, Commissioner Michelle Derusseau said one likely consequence of the failure of Proposition 1 would be the installation of modular units at the jail. Commissioners have an idea of what that would cost from a February report Weinaug prepared exploring the ramifications if the ballot question were to fail.

In his February report, Weinaug estimated it would cost the county $620,000 a year to lease a modular unit and another $905,000 to staff it. The unit would not eliminate the need to farm out inmates, he said in February, but it would reduce the county’s annual out-of-county housing cost from the current $1.3 million to $400,000.

The modular unit’s lease and staffing would be exempt from the tax lid, so offsetting spending cuts would not be required to fund them. But without spending cuts, a tax increase could be required.