Swain County allowed its fund balance to fall below 8%, which is the minimum the Local Government Commission requires. The fund balance fell from 18.62% in June, 2008 to its current level, 6.67%. An estimated $1 million is needed by the county.

Issues causing the county to continue struggling include: 15% of merchants not filling out sales tax returns properly after the recent tax increase, termination of state reimbursement for child support enforcement, contributing $75,000 more to the state’s retirement system, and repairing a sinkhole by the jail.

Swain is faulted for delaying the initiation of budget cuts about nine months longer than other counties. Unlike other counties, Swain did not inform the Local Government Commission that it might fall short of its mandated minimal fund balance. Since then, Swain has laid off eight fulltime employees, introduced a hiring freeze, reduced salaries 2%, forced employees to take five furloughs, and begun requiring purchase orders for all supply expenditures.