01/31/11 — Smith: Revaluation will cut taxes

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Smith: Revaluation will cut taxes

By Steve Herring
Published in News on January 31, 2011 1:46 PM

Wayne County residents can expect to see their property tax rate change -- more than likely decreasing -- as the result of the recent property revaluation, say county officials.

The revaluation, uncertainty surrounding state and federal budgets, lost sales tax revenues offset by the state assuming the full Medicaid burden all play into the mix of what will basically be a continuation budget for the county in fiscal year 2011-12.

Just as been the case in recent years, no additional employees nor salary increases should be expected in the new budget, said county Manager Lee Smith. And if there are additions, the county is going to have fully explain and justify them as well as track savings to prove to the public they were necessary to save money.

"The tax rate is going to change because of the revaluation," Smith said. "I can say the tax rate will come down. I am telling you first brush that I am seeing, remember it (last revaluation) was 2003, I think you will see some values go up, which means you can bring the rate down. I don't know how much. I don't know that yet.

"We will advertise a revenue neutral rate -- we are required by law. Then people can come and debate if what I recommend and what the board (of commissioners) decides is the best or not."

Revaluation is currently near its end and county residents will receive notice of their new property values in the spring. Many people will question why their property value has increased in light of not being able to sell their house Smith conceded.

Smith said the county's financial situation was "about what we thought."

"I have not been surprised by anything yet," he said. "I think we planned worst case. Then you grow from there. The audit will come out in the next few weeks. I will tell you we came out ahead last year. We came out one plus million dollars in revenues over expenditures. It wasn't because revenues came in higher. We planned on our ability to be able to cut some areas, keep from spending some areas so that we would end cash ahead."

That way the county is better prepared if it does take a $2 million to $4 million hit from the state, Smith said.

Smith said that he and finance officer Pam Holt had projected $1.5 million to $2 million in revenues over expenditures at the end of the past fiscal year. It actually came to about $1.7 million, he said.

"We were on the money," Smith said. "A budget can be predicted if you budget worst case."

Smith said the county has received calls from other counties that want to know what it has done to be in such shape. Smith credited commissioners with putting cash and budget policies in place and sticking with them.

"It is tough because they have been criticized for it," Smith said. "But today I feel like we are on top of the pile -- we do have some money in the bank so if things get worse we can at least survive and that it is not going to be as devastating to service.

"That won't mean we won't have service impact coming. I don't know what the state and federal budget will be. We have held our own. We still are. I am not shocked by anything yet."

Money could still filter down from Washington, D.C., but Smith doesn't foresee the same for state dollars.

"They just don't have it," he said. "Corporate taxes are what -- we are known to be the sixth-highest in the country. That hurts your ability to recruit industry. In combination with property tax and sales tax that is devastating."

One thing that did help the county was the Medicaid issue, he said.

"Even though we lost sales tax, the Medicaid shift was helpful," he said. "But the state bit off a lot and they bit it off in absolute not knowing that the recession was coming. They got killed by it.

"Think. They took $8 million in cost from Wayne County. Multiply that times 100 (counties) -- billions of dollars they took on. I think it is appropriate in that it is spread out across the state."

Wayne leaders still have to watch spending closely, Smith pointed out. For example, plans to move ahead with some capital projects have been put on hold -- specifically renovating property on North William Street to house the Health Department and Services on Aging.

Smith is hopeful he will know more about the state and federal budgets by March, when commissioners have their planning retreat.

"I am going to be in budget and I will know more about what the state legislature is doing, what Congress is doing," he said. "You know for us the retreat is normally about budget. I think it is a little premature because everything is so contingent on the state and federal funding."

Smith said that the schools are a major concern in terms of operations.

He said that the county can do things to control its budget -- cutting costs back, pulling things back like the capital projects. But he said he could not do the same with the schools.

"I have no control of that. They (the Board of Education) have a tough job ahead of them. They could have some major hits that would impact a lot of people, classes. Then we have to cut out school projects. We are looking at adding $2.7 million at Norwayne to replace all the classrooms. Other than a renovated cafeteria you are going to have a brand new Norwayne.

"We have got to sell bonds (to finance the project) by December. I want to have this done so we can sell bonds by September or October at the latest. I don't want to wait until November or December. If we are going to do anything we have got to move on with the projects. By March we will have heard (from the state). I hope it is not any worse than what they have told us."

Smith said that he understands that people see big government when capital projects are undertaken.

For example, Smith said that during a recent meeting a man stood him down as to why the county was building a new Health Department to compete with private doctors.

"All of the doctors don't see Medicaid patients," Smith said. "So who is going to see them and the gentleman said, 'who cares?' Well, some of these people are people who used to work who don't have a job anymore. They never expected they would have to be on Medicaid. They used to make $60 grand and now they make nothing. Where else are they going to go except for the Health Department?

"A lot of those people are indigent now. They have lost their home. I talked to two ladies this week who lost their homes in Wayne County, single mothers working themselves to death. But in the recession they lost their homes. We were there with the Health Department to fill their kids' cavities because who else is going to see them? Who else is going to do it?"

While the county has delayed the Health Department and Services on Aging issue it is still one that county is going to have to act on, he said.

"I have got buildings that are absolutely crumbling, heating and air conditioning that is 30, 40 years old and what I am doing now is putting out fires," he said. "If something breaks I fix it. I can't be as pro-active as I want, but I can do better. Schools are the same thing. We have to catch up."

Smith said he is hoping for a good year and some job growth, but that it will be a "long haul."

"It will be years of change. It was a painful correction that was going to happen and now people have to learn to live differently.

"It will never go back to the way it was, in my opinion."