County Looks at Options to Cut Budget
Moore County may be able to achieve a 5 percent reduction in its 2009-2010 budget, but it's unlikely that it can be achieved with a cut in the tax rate.
Those are just a few of the conclusions reached by the Government Efficiency Advisory Board in a report to the Board of Commissioners Monday night.
Since March 16, the four advisory board members have been plowing through county revenue and budget figures to analyze the financial situation and determine the feasibility of budget cuts and a tax rate decrease.
"We want to thank you guys for wading through all those numbers," said Commissioners' Chairman Nick Picerno, a former member of the advisory board.
Dick Westcott, acting chairman, presented the report on behalf of the panel, which also includes Dave Funderburg, Bob Tweed and Denzel Williams.
Westcott reported that as of last week, the county staff has confirmed that a $4.5 million reduction in expenditures can be achieved to reach a fiscal year 2010 level of $85.8 million. Thus, the board came to the conclusion that a 5 percent budget reduction is feasible.
However, the board also determined that revenue may not be sufficient to reach that total.
The panel quoted the staff as saying that a 1-cent tax rate reduction would result in a revenue reduction of $1.14 million. If revenues for the new fiscal year are the same as those of the current year and 2010 expenditures are cut by $4.5 million, then a 3-cent rate reduction would be practical. The 3-cent cut represents $3.4 million.
Unfortunately, revenues are declining rapidly, the board learned.
In the month since the panel began working on this puzzle, its members observed a continued decline in revenues, and they fear that the risk of additional revenue losses remains.
The panel also took note of capital requirements for the new government complex and the expected cost of implementing a system-wide computer upgrade.
"We assumed that invading the undesignated general fund reserve (fund balance) is not an option," their report said.
Their conclusion is that a tax rate reduction is not feasible at this time.
"If revenues remain level from FY09 to FY10 and expenses are reduced by $4.5 million, there would be room for a 4-cent tax rate reduction," the panel reported. "However, declining revenue estimates have offset the $4.5 million cut in expenditures and become the controlling number to maintain a balanced budget."
The report did not specify the areas in which the $4.5 million in expenditure cuts would be made. It relies on information supplied by the county staff.
After the presentation the commissioners had questions of their own.
Picerno asked for more information on the cost reductions, and Commissioner Tim Lea wanted to know if the panel had seen the latest report from the Davenport Co. on the financial picture. The Davenport account, presented at a work session last week, says a 1-cent tax rate reduction is possible.
Commissioner Larry Caddell thanked the panel for the work and added that "we're blessed to have these people."
Contact Florence Gilkeson at 947-4962 or by e-mail at firstname.lastname@example.org.
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