Local boards are finding themselves on the wrong end of the dog when it comes to putting together budgets for the upcoming fiscal year.
In Jackson and Macon counties, at work sessions held by commissioners in their respective counties last week, much of the discussion at these relatively informal get-togethers involved speculation on when — and what — might be expected from the state General Assembly.
The state, as it were, would be the front end of the dog.
North Carolina is facing a projected $3.7 billion shortfall. Thousands of state jobs are threatened, with massive cuts expected to come for health and human services, schools and other critical services offered on the state and local level.
So, what does that mean for counties?
“There are certain things we have to provide,” said Evelyn Southard, finance officer for Macon County.
And not knowing how much money will come down the pike from the state complicates matters, she said. When counties will know the full extent of the financial devastation is unknown, but that knowledge is critical to local boards starting preparations on budgets for the next fiscal year.
Macon County Manager Jack Horton warned his board that even though members of the General Assembly are making happy noises about having their budget passed by the end of June, August is more typical, and the state has actually lagged before into October.
“We have to have the (ability) to take care of the county business whether the state gets their house in order or not,” said Horton, a veteran administrator who has also worked over the years in Swain and Haywood counties.
Jackson faces immediate shortfall
In Jackson County, officials were concerned about staying within this year’s budget in addition to preparing next year’s.
Jackson County must either slow its spending, interim Manager Chuck Wooten said, or the county must dip into the fund balance — those are the two choices facing Jackson’s commissioners. An across-the-board cut for county departments seems the most palatable option of the two, Wooten said.
The problem is not enough people are paying their taxes in Jackson County. A gap between the budgeted tax-collection rate for the current fiscal year, and the actual collection rate occurring so far is 0.62 percent off what was originally projected. Sounds tiny, but that adds up to big bucks: there is a projected revenue shortfall for the current year of $336,004, including failures to pay vehicle taxes.
The recession has taken its toll on all counties when it comes to people paying their taxes. Jackson’s budget for this year assumes a property tax collection rate of 95.4 percent. Last year, the tax collection rate was only 94.8 percent, but county leaders apparently banked on it coming back up.
Wooten said as a result this year’s budget is “too optimistic,” though he stopped short of assigning blame. Wooten replaced longtime County Manager Kenneth Westmoreland in January.
In response, Jackson County commissioners indicated they would probably become more aggressive in tackling tax scofflaws.
“Why have we not gone after this?” Jackson Chairman Jack Debnam asked, presumably of the only two (Democrats) commissioners who remain from the previous board.
Debnam then answered his own question: “I know, we’re a small county — they could be friends and relatives.”
New Commissioner Doug Cody, a Republican, warned his fellow members that favoritism must play no role.
“If we go down this road, it is important to treat everyone equally,” he said.
Macon County leaders, by comparison, were merry about having a mere $34,283 projected discrepancy.
“And I think there’s some room in here for our expenditures and revenues to be even better than is shown here,” Southard said.
In other state-local government news, the N.C. Association of County Commissioners last week passed a list of legislative goals the group wants state leaders to adopt. Beale, who attended the meeting, summarized the top five priority goals of the group:
• Oppose shifting road maintenance from the state to the counties.
• Reinstate Average Daily Membership, a formula that uses school enrollment to determine funding levels, and lottery funds for school construction.
• Ensure adequate mental-health funding by seeking legislation for adequate capacity of state-funded acute psychiatric beds; oppose closing state-funded beds until there is adequate capacity statewide, and seek legislation to maintain the existing levels of state funding for community mental-health services.
• Preserve the existing local-revenue base (don’t take money streams away from already-hurting local governments).
• Authorize local revenue options by allowing counties to enact by resolutions, or at the option of boards of commissioners, by voter referendum any or all revenue options from among those that have been authorized for any other county.