Today's tough economic climate may lead to a cut of 5 percent in the county budget for the new fiscal year.

County Manager Cary McSwain mentioned the 5 percent level Thursday during a daylong business retreat of the Moore County Board of Commissioners.

However, the board did not rule out cuts as high as 15 percent. The commissioners did not take a stand on the issue, which will be resolved at budget-making time next year.

"I hope we don't ever have to go to 15 percent," Commissioner Jimmy Melton said. "We need to wait till all the figures are on the table before we decide on cuts."

The budget cut discussion came near the end of the retreat held at the Senior Enrichment Center.

Also present were Board Chairman Tim Lea, Commissioner Nick Picerno, Commissioner-elect Craig Kennedy and several members of the county's supervisory staff. Commissioner Larry Caddell had previously reported that he would be unable to attend because of a scheduling conflict.

"The new year won't be a good budget year," McSwain said.

Earlier in the day, the commissioners heard a series of reports relating to the economy and budget issues. Although most reports showed glimmers of a modest, slow recovery, all told of heavy losses and little expectation of a rebound in the next year or two.

Losses of federal stimulus funds and uncertainty about the state's fiscal condition compounded the dilemma for county leaders'

McSwain emphasized that he will never recommend that the county dip into the unappropriated fund balance to balance the General Fund. He said that the fund balance and the capital reserve fund should never be used for operational purposes except in a crisis situation.

He added that if the state ever tried to penalize the county for the size of its fund balance, he would "fight it tooth and nail." Nevertheless, there is the reality that, because of the state's projected $3.2 billion shortfall, the state may raid some county resources.

"We are a creature of the state," Mc Swain said.

McSwain said he is asking the staff to exercise more creativity, innovation and efficiency to save as much money as possible.

Picerno suggested that county employees will be better motivated to work harder and improve efficiency if they are assured of some reward. He pointed out that if fewer employees are available to handle more work, the people producing more work should be able to expect raises or other rewards.

Picerno said he did not want anyone fired. He said he preferred to reduce the workforce through attrition, such as retirement and movement to other communities. He added that the county needs to place less emphasis on "gloom and doom" and replace that with morale-boosting measures.

"I think we're all on the same page there," Lea said.

'Against the Wall'

Earlier in the retreat, the commissioners heard from School Superintendent Susan Purser, who expects $7.3 million in state budget reductions for the 2011-2012 local budget. The county school system is looking at a 10 percent budget cut.

Even with the possibility of $2.4 million from the new federal Jobs Bill, the local school system expects heavy losses. One major item cut from the new budget will be federal stimulus funds, $5.3 million of which enabled the system to balance its budget this year without the loss of teaching positions.

Purser revealed the sober expectation that the system may not be able to manage in the new fiscal year without some teacher position losses. Projections at the state and local levels indicate that the loss will range between $10.3 million and $16.3 million by the 2012-2013 budget year, a reduction of 16 percent since the 2008-2009 year.

Purser said that the system had avoided the loss of teaching positions through attrition and with help from stimulus funds. Now there's not that much attrition, and the stimulus money is gone.

"We're up against the wall," Purser said.

Purser said teachers, administrators and students are finding new and better ways to save money, including such simple things as using both sides of sheets of paper.

"Children keep coming," Purser said. "Nobody says, 'We're out of money. Go home.' Our teachers are working harder today than they have ever worked."

"We want to keep our teachers in the classrooms," said Pam Thompson, vice chairwoman of the Board of Education. "We're going to try to do that. We have tough decisions ahead."

Thompson will not be returning to the school board for the new year, and this was her last meeting as a board member. She was joined by other new and existing board members.

In 2008-2009, the Moore County school system had an operating budget totaling $99.3 million, of which $66.7 million came from the state, $27 million from the county, the rest from the federal government. The county's share of the education budget represents the single largest appropriation in the county budget.

'Good Stewards'

The commissioners also heard from the other major education budget item at the retreat. The speaker was Rich Gough, vice-president/business/administration at Sandhills Community College.

"We feel like we've been good stewards," Gough said. "It has become increasingly difficult. We hope the county can fund us at the existing level."

The zero-growth budget request, not yet adopted, would represent a reduction because the college has already added new buildings and is in the process of erecting others in the coming year. Such buildings add to operational and maintenance expenses. The college also faces insurance increases.

The college expects even more budget cuts from the state in the next year.

George Little, chairman of the SCC board, reminded the commissioners that his board has not yet adopted a budget and that no one knows the direction the new legislature will take. The 2011 session of the state General Assembly will be quite different because Republicans will dominate both houses for the first time in more than a century.

In a brief overview of the college enrollment, Gough reported a total of more than 10,000 students, of whom about 4,600 are full-time curriculum students. The number of high school students enrolled at SCC is down to 300 from the earlier high of 500 because of state budget cutbacks.

In the past five years, the college has experienced an average enrollment increase of 5 percent yearly.

Gough said that the county portion of the budget consists largely of salaries and utilities, expenses that are not discretionary and are difficult to cut. He said the college is trying to do more with less and still retain Sandhills' high quality of instruction.

Because of budget cuts last year, the college laid off five or six part-time custodians, and now faculty, staff and students do more of that work themselves, including emptying trash cans, Gough said.

The retreat was called to provide an economic overview for the commissioners prior to their more detailed work on the 2011-2012 budget. They will hold a two-day retreat in January to tackle those details.

Contact Florence Gilkeson at florence@thepilot.com.