Macon raises tax rate to address capital needs
County Manager Derek Roland was tasked with delivering a flat budget for the 2021-22 budget year, but after countless hours of heated discussions, Macon County Commissioners approved increasing property taxes with a narrow majority.
With a 3-to-2 vote of approval, Macon County’s property tax will increase from 37 cents per $100 of assessed value to 40 cents. The increase is estimated to bring in an additional $2 million in annual revenue. Commissioners Paul Higdon and Josh Young voted against the budget.
The $2 million gain will go toward providing a 2 percent cost-of-living raise for county employees ($400,000), $600,000 toward implementing the forthcoming recommendations of a pay study, increasing the Fontana Regional Library budget by $30,000 a year, a one-time investment for Nikwasi Initiative and a one-time $10,000 capital project at Cowee School. The remaining funds will be placed into the county’s contingency fund to make sure the county has enough funds to implement the pay study. If the money isn’t needed to increase pay for county positions, it will be put toward capital needs for the school system.
Higdon said he couldn’t support increasing property taxes.
“We gave Derek the charge to give us a flat budget and he does an excellent job and then we have all these personal wants — we’ve blown this budget all to pieces,” he said. “We need more in contingency because we can’t stay within a budget.”
On May 25, Roland presented the commissioners with a balanced budget of $54,641,096 that maintained the same millage rate as last year. The proposed budget increased 2.4 million — or 4.5 percent — over last year’s original budget and a 2.6 percent increase over the 2019-20 budget. The county’s fund balance also increased by 2.5 million, bringing the county’s total savings account to about $27.6 million, representing about 51 percent of the county’s annual expenses.
“Every local government across North Carolina saw a fund balance increase in 2021 because of the influx of COVID funding and because we braced for the worst last year and thank God we got the best,” Roland said.
He was referring to the unexpected increase in revenue streams — Macon received $1.56 million from the CARES Act for pandemic-related expenses — but the county also saw a huge increase to its sales tax revenue during the pandemic. Overall, the county saw a 19 percent increase in sales tax revenue, bringing in $10.5 million.
Though the increase in revenue is great news, Roland said the county has also been hit by a number of expenditure increases as well as a long list of capital needs. For the first year in many years, the county’s health insurance premiums will remain flat, but the state is requiring another increase to county contributions to the retirement plan that will cost Macon an additional $196,000.
The county is also expecting the results of a pay study to increase its budget by more than $1 million to bring county employee pay up to current market levels in order to improve recruitment and retention.
“As the economy improves, wages increase and so does the competition to recruit and retain employees,” Roland said. “As of May 12, we had 50 vacant positions, and a majority of those are in priority areas providing critical services — seven vacancies in public health, 11 in department of social services, seven in EMS, one in telecommunications and 12 in the sheriff’s department. The compensation and classification study will help us to design a marketable pay structure.”
The public safety budget will increase by $800,000 this year for a total of about $15 million to cover the cost of a new ambulance, a new animal control crate, a new generator, new dash cams for sheriff patrol cars and another $55,000 to cover the increasing costs of housing Macon County inmates at other jails because of capacity issues.
Public transportation’s budget will increase by $33,520 for a total of $1.5 million to cover the cost of a multi-year facility expansion project.
Health and Human Services budget is about $13 million and includes funds this year to purchase two new vehicles.
The recreation department will see a $200,000 increase to its budget ($2.8 million) for a new vehicle and a joint capital improvement project with the town of Highlands to improve the lighting at the ballfield for $127,500.
Public schools needs
The Macon County Schools budget request each year usually takes up the most discussion among the commissioners. Once again, Roland presented commissioners with a budget that kept Macon County Schools at the same funding levels for operational costs and capital projects even though the schools requested additional funding that would allow them to restore and expand its art and music programs at the elementary and middle school levels.
Overall, Roland recommended $10.3 million for the school system — $8.2 million for operating expenses, $80,000 for water and sewer fees, $532,590 for teacher supplements and $1.15 million for capital outlay.
Since the school system is expecting to see at least 34 fewer students in the upcoming school year, Roland said the county’s contributions would be an increase in the per-pupil funding. At current levels, the county is contributing $1,961 per student.
Not reflected in the schools’ budget is a $350,000 health department grant that will allow it to continue the school nurse program. The grant is paying to have five nurses in the schools — representing a 1 to 898 student/nurse ratio.
Roland also pointed to two pieces of proposed legislation in the House of Representatives that if approved, would place a nurse in every public school across the state, which is why he did not include the schools’ request for five more nurses within the county budget.
The schools’ budget also doesn’t reflect the $650,000 worth of funding in the sheriff’s budget to make sure Macon County has a school resource officer in each school.
Roland also didn’t include the schools’ request for an additional 10 mental health professionals, which would have cost $820,000, because he said the state planned to spend $1 million to expand the existing tele-health program in schools to help students who are struggling.
Lastly, Roland did not include additional operating funding that would allow the school system to hire more art and music teachers — something that community members have spoken in favor of over the last couple of months during budget talks.
School Superintendent Dr. Chris Baldwin recently explained to commissioners how important art and music were going to be in improving student academics and also their mental health coming out of the COVID-19 Pandemic.
“We have to address their social and emotional needs before we can address the academic losses,” he said. “You’ve heard how important the arts are to our community.”
Commissioners have argued that it is the state’s responsibility to fund teacher positions and it’s up to the school board to determine how it will prioritize its operational budget. However, Baldwin explained to the board that the state’s class size mandate for kindergarten through third grade has eaten up any additional funding for the last few years during the gradual implementation. To meet the new class size limits, Macon has had to hire 15 new teachers across the district.
While Baldwin is hopeful that the school system will be able to use some COVID relief funds to hire more mental health professionals and add more art and music classes, those proposals have to be approved through the federal grant process. The schools’ applications are currently still pending. Also, that funding will eventually go away and the schools will have to figure out how to continue to fund those positions or lose them all over again.
Commissioners have also spent hours discussing how to proceed with the need for a new Franklin High School. A plan has been presented to rebuild a new facility on the current campus at an estimated cost of $88 million. While the board approved moving forward with plans for the replacement, Higdon was opposed without more discussion and public input. He suggested a referendum, but Commissioner Ronnie Beale said any referendum was likely to fail even though the school needs to be replaced.
“If the referendum fails, then what, we wait another 50 years?” Beale asked.
“If that’s what the people want, Ronnie, give it to them,” Higdon replied.
A public hearing regarding the budget was held at 6 p.m. June 8 (after press time). It is unknown whether the board will vote on the budget following public comment or if they’ll take more time to discuss. A balanced budget must be adopted by the end of June.