Sylva dips into reserves to avoid tax hike
Sylva town leaders have chosen not to raise taxes next year and instead delay town expenditures, save money where they can and dip into reserve funds to shore up the budget.
In summary, the town is proposing to reduce expenditures by more than $80,000 going into next year and siphon $150,000 from reserve funds to balance the $3.2 million budget.
The cuts will do away with the town’s contributions to outside organizations like the Jackson County Chamber of Commerce and public library, as well as eliminate the public parking downtown that the town leased for merchants. The Sylva Police Department will also have to forgo one of the three new patrol cars it was planning on, and other departments will have to put off certain purchases.
The sum total is what town officials are describing as “bare bones.”
“There are no frills in this budget,” said Town Manager Paige Roberson. “It’s just balanced.”
Despite the cuts, town leaders are still looking to take about $100,000 from the town’s fund balance and another $50,000 or so from its more than $3 million Fisher Creek Land Trust fund, money the town received from the N.C. Clean Water Management Trust Fund for preserving its watershed.
The town’s fund balance currently sits slightly below $2 million, and the town has designed its two most recent budgets around drawing $100,000 from the fund. Roberson had initially suggested raising taxes in May to balance the budget instead of relying so heavily on non-renewable sources of funding.
Roberson had the support of Mayor Maurice Moody, who felt a slightly smaller tax hike should have been considered to avoid as many of the cuts, as well as drawing on limited funds.
“I felt like we probably should have had a 2- to 3-cent tax increase this year,” Moody said. “That probably would have made more sense. We could have cut less and taken less out of reserves.”
Nevertheless, a majority of the board felt strongly against raising taxes. The public hearing for the budget took place last week, and the final version will be passed later this month. Town Board Member Chris Matheson said what is passed will save residents from a tax increase this coming year.
“I think the majority of the board was trying to find a way not to raise taxes,” Matheson said. “And we’ve made it through this year, with this budget.”
Looking into the future, Matheson said the town needs to grow itself economically as a way to increase revenues. Much of its woes in this budget cycle were due to unforeseen drops in revenue.
An estimated $25,000 in town revenues will be lost next year in the absence of video sweepstakes and the licensing fees they paid to the town; another $60,000 or so from a drop in liquor store revenue; and a $10,000 or so reduction in miscellaneous fines.
But if revenues do not pick up soon for Sylva, Roberson fears the town will be in the same situation next year. And eventually the reserve funds will dwindle.
“We’re spending non-renewable resources to operate, but the budget is balanced,” Roberson said. “In the long-term, you need to offset the shortfall with additional revenue.”