Interim Cherokee County Administrator Ben Clary on Monday proposed eliminating 34 positions, raising taxes and making cuts in capital expenditures as options to bridge a whopping $780,085 budget deficit.

Clary delivered the stark financial forecast at the Cherokee County Council meeting.

Under a scenario presented by Clary, the county could balance the proposed $18,663,697 budget by slashing all capital expenditures - a total of $617,812 - and dwindling its fund balance by $162,273. Clary called that suggestion a starting point for further budget discussions.

Clary also offered other options to balance the budget, including:

- Raising taxes 2.29 mills, the limit allowed by a new state law;

- Eliminating 34 employees with an average annual salary of $23,000;

- Dipping into the fund balance; - A combination of all of the above.

Clary characterized dipping into the fund balance as "risky because of having to raise revenue in future years to meet budget needs and the fund balance would be depleted and interest earned revenues would be lost."

Increasing taxes would only generate $332,000, leaving the county a deficit of $448,035.

The workforce reduction would save the county about $782,000 and balance the budget without any other combination of cuts or tax hikes.

Clary said he hopes to have a preliminary budget to present to council later this month.

Last year Clary spared county property owners a .95-mill tax hike by cutting $140,042 from the operating budget. The cuts reduced the county's general operating millage from 63 mills to 62.05 mills.

Council learned some other bleak financial news Monday - the millage rate to cover its debt service will increase 1.8 mills - from 3.4 mills to 5.2 mills. County auditor Nancy Elliott said the increase was needed to satisfy a state law that requires governments to have enough funds on hand to pay the debt service's principal and interest for an 18- month period.

IN NEED OF SOME CASH

Here are some options interim Cherokee County Administrator Ben Clary offered to help balance the budget, including:

. Raising taxes 2.29 mills, the limit allowed by a new state law;

. Eliminating 34 employees with an average annual salary of $23,000;

. Dipping into the fund balance; . A combination of the above.