Haywood may look to property tax hike to offset still sagging sales tax revenue
Haywood County, like everyone else, is bracing for the impact of state budget cuts. But the good news is that they may leave the budget fray with fewer scrapes than they thought.
In Raleigh, budget committees have been busily trying to bang out cuts in the billions, and while nothing is yet final, a proposed House budget released last week gave a view of the carnage that may be to come.
So Haywood commissioners met with county staff to hash out what this might mean for the county’s budget and the services that rely on it.
Though there will certainly be state cuts that will fall to counties to pay for, but County Manger Marty Stamey told commissioners at a budget workshop last week he’s not as concerned as he could be.
“Best case scenario, we’ll be $250,000 out, which is good,” said Stamey, meaning that a mere $250,000 shortfall would be their best landing in the budget fallout. “A lot of counties would be proud to be where we are. People say what they want to say, but budget-wise, we’ve done the right things over the last few years.”
The county’s budget is still in flux, waiting on both state cuts and the reaction of other groups, such as community colleges and the school system, which may come to the county for helping plug holes from state cuts of their own.
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Currently, community colleges are looking at a 10 percent reduction in state funding, while K-12 education was slightly shielded, only facing an 8.8 percent cut.
One area where the county might feel some crunch is in its health and human services budget. The state is seeking to reduce spending there by $527 million, including $527 million in Medicaid, $67 million for mental health services and half of the funding for senior centers. Also on the chopping block are Community Care block grants and Smart Start spending.
“Human services are really busting at the seams for demand in this county,” said Stamey, noting that a decline in services would affect many citizens harshly.
Another proposal that staff said seemed likely to come through is the closure of four state prisons. Though there’s no word yet on which prisons would close, it would shift the burden of housing prisoners serving time for misdemeanors to county jails.
Stamey reported that, while Sheriff Bobby Suttles said he was confident he could house the criminals currently in the system, predicting whether they’ll have room in the future is impossible.
“That’s one reason that we think we might need to have higher contingency this year, for things like this, because that’s an unknown,” said Stamey.
On the revenue side, Finance Director Julie Davis told commissioners that the picture is no clearer there.
Surprisingly, said Davis, the property revaluation that happened this year isn’t what’s throwing projections into turmoil.
Usually, property values would go up with a revaluation, requiring counties to tinker with the tax rate to offset would would otherwise be an unpallatable rise in property taxes.
But due to the stagnant real estate market, the total value of property remained nearly flat in the recent revaluation — requiring little adjustment to the property tax rate to bring in the same amount of revenue as last year.
Sales tax is a different story, however.
“Sales taxes have been up and down. Looking at the comparison to last year, four months they’re up compared to the current year and three months they’re down,” Davis said. “Were chasing a moving target on revenues.”
The fluctuation makes it hard to predict how much money the county can bank on from sales tax next year, but year-to-date on average, sales tax collections are down 10 percent over last year.
In light of that, and state-level slashing, a property tax rate increase might not be out of the question.
Overall, though state cuts do look grim, Stamey said he’s confident in the county’s ability to stay afloat without undue carnage. But, he said, there just aren’t any solid numbers yet to be had, so it’s impossible to know for certain.
“We’re at the mercy of a lot of people’s budget’s right now to sort of figure out our budgets,” said Stamey. “I feel like I’d be doing us an injustice right now [to give numbers].”
The picture painted by county staff was in broad strokes, an overview of what could be coming in stead of the nuts and bolts of what to do about it. But that was purposeful, according to Davis.
“We specifically did not mention numbers or the revenue neutral rate because there is so much up in the air right now,” said Davis.
Commissioners will be meeting throughout the spring for more budget talks, though they noted that much of it is out of their hands.
As Commissioner Kevin Ensley said, “so if the state leave’s us alone, we’ll be alright.”
A state budget is expected by early June.
Haywood schools talk budget
Haywood County Schools could be facing a budget shortfall of $4 million if the state House of Representatives proposed budget gets adopted. The school board held a public hearing on Tuesday to hear community feedback and discuss what cuts might mean for local schools.
The reductions would mean 46 positions would be slashed within the system. Teacher assistants would be scaled back by 49 percent, textbooks by 68 percent and dropout prevention programs, school technology and staff development initiatives, among other things, would be eliminated.
See www.smokymountainnews.com Thursday for an update on the public hearing and the impact of threats to school funding.
