Tax Cut Decision Delayed
Reducing the county tax rate by 3 cents would require budget cuts of almost $7.5 million in the 2009-2010 fiscal year.
This was the projection presented to the Moore County Board of Commissioners Monday night, when Financial Services Director Lisa Hughes and Tax Administrator Wayne Vest delivered updated statistics on what to expect if the proposed tax rate cut is carried out.
The board asked for the additional data at a February meeting, when Commissioner Tim Lea proposed the tax cut along with other budget changes, including a 5 percent decrease in the new budget and a cap on the fund balance.
"We still have a long way to go," Hughes said after reporting the effect that major decreases in employee compensation would have on the budget.
A tally of such things as cost-of-living pay raises and longevity benefits shows that the total $1,265,500 in cuts would not be enough. Nor would it fill the gap if no rate cut is approved, but the budget loses more than $4 million because of lower revenue projections.
Sharp budget cuts would also mean the elimination or severe reduction in allocations the county makes to nonprofits, ranging from Pinetree Enterprises to the Arts Council.
Hughes predicted that if the rate is cut, it may be necessary to impose a half-cent rate increase in the 2010-2011 year and a 3.7-cent-increase the next year to meet the county's obligations on building plans.
"We have an excellent tax department and an excellent collection rate," Hughes said in one of the few bright spots of the meeting.
Vest provided tax value and collection data dating to 1997, with special attention focused on property revaluation years 2003 and 2007.
As of February, the county had collected more than $51.9 million in taxes on property valued in excess of $11.4 billion. Vest projected collections totaling $53.9 million by June 30. He provided separate statistics on collections of the advanced life support tax and fire district taxes, which are in addition to the other property tax and are designated for special purposes.
Hughes was also asked to provide background on the longevity aspect of the county's personnel policy, in place more than 20 years. Under this policy, personnel who work fulltime for at least three continuous years are eligible for longevity pay increases, starting at 1 percent and capping at 5 percent for 21 years and longer. For the 2008-2009 budget, longevity pay accounted for $340,834.
Her report also shows that cost-of-living adjustments amounted to $502,831. Other possible cuts include $200,000 in annual increments and $221,835 in step advancement.
County Manager Cary McSwain warned that draconian cuts could mean a severe reduction in quality of service offered by the county to residents. He also expressed concern that sharp cuts into the fund balance could have a negative effect on the county's bond rating, which, in turn, could affect interest rates.
But Lea said many residents are suffering because of the economic slump. He said many don't know where or when they will get their next paycheck, or whether they can keep their homes or the source of their next meals.
"At what point does the bureaucracy stop growing?" Lea said.
Lea said the county has the ability to reduce operational expenses this year and suggested that it would be better to cut with a scalpel this year than to be forced to wield a hatchet the next year.
"At some point, it's time to give something back," Lea said. "I think we're at that point."
Board Chairman Nick Picerno said he would like to adopt a 3-cent cut but did not think he had sufficient information to make a decision during the meeting. He said he didn't want to vote on something, then have to change his vote later.
Vice Chairman Jimmy Melton said he also needed more information, such as the latest projections about state finances and budgeting measures. Melton said he was not prepared to vote at that time.
Commissioner Cindy Morgan wanted to know when the budget would be ready.
On a motion by Lea, the board voted unanimously to table the tax rate reduction until the second meeting in April, when more data would be available.
However, a follow-up motion by Lea to apply this year's budget level to the new budget level fell by the wayside on a tie vote with Picerno and Melton casting dissenting votes and Commissioner Cindy Morgan joining Lea in voting for the motion. The fifth commissioner, Larry Caddell, did not attend because of illness.
Lea then asked that the matter be referred to the County Government Efficiency Advis-ory Committee, a motion that met unanimous approval.
Contact Florence Gilkeson at 947-4962 or by e-mail at firstname.lastname@example.org.
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