“It’s conservative budgeting meets sustained revenue,” County Manager Derek Roland has said repeatedly throughout the budget process.

Roland first presented the budget to the board of commissioners in May. The proposed Fiscal Year 2023-24 budget totaled just over $64.5 million, for an increase of 9.3% over the previous year. It did not pull any money from the fund balance and maintained $42 million, or approximately 68% of expenditures, in the fund balance. The proposed budget was balanced with a tax rate of $0.27 cents per $100 of assessed property value. While this was a significant drop from the tax rate of $0.40 per $100 of assessed value just last year, because the recommended tax rate was revenue neutral, most residents would not see a drop in the amount they pay in property taxes.

However, some commissioners made it clear from the outset that political optics were a vital factor in passing the budget, even one conservatively budgeted with the lowest proposed tax rate in the state.

“I understand the fiscal end of this thing, the financial end of it; you all do a great job of handling that, but there’s also a political end of this thing. We’ve never had a $5.5 million budget increase. A budget is a reflection of expenditures and revenues, but it’s the aesthetics, the optics of the thing,” said Commission Chairman Paul Higdon during the June 13 budget workshop. “As a conservative, there’s got to be some way that we can either roll things over next year or use fund balance to pay for some major one-time capital improvements. But to me, politically, that number has got to be decreased. Maybe that’s being selfish, but we are a political body.”

While the proposed 2023-24 budget was a 9.3% increase over the current year budget as it was passed last June at $59 million, Finance Director Lori Carpenter noted that the current year budget, as it has been revised throughout the year, is sitting at $65.4 million, which is actually more than the proposed 2023-24 budget of $64.5 million.

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“I’m a conservative too, we have prepared it very conservatively,” said Carpenter.

Early in the budget process commissioners began looking for ways to bring the total budget number down, as well as adding in items they were committed to.

One of the ways the commissioners looked to lower the overall budget was to reduce pay increases for county employees. The proposed budget included a one-step advancement in the pay scale for all employees and a 3% cost-of-living adjustment. The one-step advancement amounts to an approximate 1.5% increase per employee resulting in a $424,200 increase from the current year budget to the proposed budget for the coming fiscal year. The 3% COLA results in a budget increase of $772,438.

The Southwestern Commission published a study that indicated the average COLA and merit increases for counties and municipalities in the western region of the state to be 3% and 1.8% respectively.

“The 3% COLA, one step, averaging 4.5%, me personally, that’s too much,” said Higdon. “I’m good with 2%.”

While Commissioner John Shearl agreed with Higdon on reducing pay increases, Commissioner Josh Young argued for keeping the increases because of how inflation is affecting families.

“Everybody in the government, anybody that’s in law enforcement, EMS, Parks and Rec, there are families involved,” said Young.

“This is probably the most critical piece of this budget,” said Roland. “...I realize that no matter how much we talk about capital improvement, no matter how much we talk about anything, none of that’s possible without being able to continue recruiting and retaining highly qualified employees.”

According to the county manager, the proposed increase would equal an 85-cent-per-hour increase for a sheriff’s deputy that makes $17 per hour.

During the June 19 budget workshop, Commissioners Danny Antoine, Josh Young and Gary Shields expressed their support for county employees and keeping the raises in the budget.

“I am in favor of the increase for the employees,” said Antoine.

Commissioners also debated whether the purchase of a new Molar Roller should be in the forthcoming budget. The Molar Roller is a mobile dental clinic which travels around Macon County providing routine dental services for children. The Molar Roller is outdated and after Medicaid reimbursement funds, the county was looking to spend about $300,000 on a new unit.

Shearl made the first motion to accept a budget during the June 19 meeting. Part of that motion included several changes to the budget — funds removed for the Molar Roller, funds removed for the Highlands School soccer field, funds removed for animal control truck and box, funds removed for a new animal control position, funds added for Zachary Park building repair and grading work for practice fields, funds added for phase two and phase three of the Highlands School expansion and funds added for a body scanner at the jail. Shearl also proposed no additional fees for the Macon County Landfill or the Highlands transfer station.

Shearl proposed a decrease in the tax rate to $0.26. He also made clear that the budget he was proposing would contain raises for county employees this year but would not necessarily be included in the following year’s budget.

“That’s well and good, but the majority of these are capital items and the millage rate is operating revenue,” said Roland. “So we’re cutting operating revenue to offset capital expenditures. I would caution, that is our most reliable and primary revenue source, that funds our operation. It's revenue neutral right now.”

Shearl’s motion for the 2023-24 budget failed with Higdon voting for the measure and Antoine, Young and Shields voting against.

Commissioner Shearl continued to advocate for a reduced tax rate, but the county manager urged the board to maintain the proposed tax rate of $0.27 for several reasons, one being the ability to maintain work on the capital improvement plan which involves constructing the new Franklin High School, another being the ability to maintain a healthy economic standing in the coming years.

“As manager, I feel like it is my responsibility to let you know how important that revenue source is to our operating budget and the consistency that it provides and the assurity (sic) that it provides to the operation of this organization,” said Roland. “I can’t in good faith say to go below the number that myself, the financial advisor and our finance officer — at 27 cents, revenue neutral, the lowest tax rate in the state — that we based our capital expenditures on. That's what we based this operating budget on and that's the amount of revenue that we need to run this organization. So I can’t in good faith say go and reduce the primary revenue source another $800,000 when we’re already having to take on cost-of-living adjustment, we’re already having to take on increases in CPI, cost of goods increases, increase in demand and should that continue and at the same time the sales tax fall, then we’re just gonna be stuck, so that’s all I’m saying.”

The final version of the budget that was accepted by the county commission on June 19 came on a motion from Commissioner Young. He proposed keeping the tax rate at $0.27 as it was originally proposed by staff, and on the recommendation of the county manager, reducing the amount budgeted for interest on investments in order to reduce revenues.

“We’re reducing a non-recurring revenue source to match a nonrecurring expenditure rather than reducing a nonrecurring expenditure and reducing a recurring revenue source,” said Roland.

The final budget totals $63,754,537. It does not include funding for the Highlands School soccer field project, but includes funding for design and construction documents for the Highlands School renovation project; it contains step and COLA increases as proposed for county employees; it contains funding for the new Molar Roller, but does not include funding for the animal control officer, truck or box; it reduces contingency by $285,657; it includes funding for Zachary Park improvements and a body scanner for the Macon County Jail. This is a net reduction of $812,441.

“I do appreciate everybody on this board and their political convictions and trying to keep our county fiscally responsible and really trying their best. I do appreciate that as a taxpayer myself. But I want you to keep in mind, we have the lowest tax rate in the state of North Carolina, and look what we’re able to do with the funds that we collect. I look at this from a 10,000-foot perspective and it’s really quite impressive, it really is,” said Young. “So please don’t lose sight of that.”

Commissioners Young, Higdon, Antoine and Shields voted in favor of the budget as it was amended in the motion from Commissioner Young. Commissioner Shearl voted against it.