06/14/11 — County targets revenue-neutral

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County targets revenue-neutral

By Steve Herring
Published in News on June 14, 2011 1:46 PM

More than five hours spent Monday by Wayne County commissioners trimming their way through the county's $158 million budget proposal fell short by about $400,000 of the board's goal of cutting enough to prevent a tax increase.

However, County Manager Lee Smith assured commissioners that reducing the budget by $1.4 million could be done, and in doing so, avoid the 2.35 cent increase on the tax rate that he had recommended in his budget message.

Stopping for only one brief break, the board waded through the more-than-200-page budget proposal looking for areas to cut before coming up with about $1.1 million in possible reductions.

The reductions range from eliminating some $200,000 in capital projects to more than $350,000 in contingency funding. Smith had suggested possible cuts of up to $500,000 in capital projects, but commissioners appeared hesitant to go that high.

Schools were among the areas that escaped cuts.

Commissioners even agreed to have Smith find an additional 10 percent, about $25,000, in cuts in their budget. Smith said he thought he could reduce the manager's budget by about $7,500

Commissioner Steve Keen had the most questions, focusing mainly on budgeting for professional services in different county departments.

Smith said he would compile the board's suggestions and would find enough additional cuts to have a list ready for commissioners by later today. Commissioners said they trusted Smith to provide the additional cuts and saw no need to have another meeting prior to a public hearing on the budget on June 21 at 9:15 a.m. in the commissioners' meeting room on the fourth floor of the county courthouse annex.

Smith had hardly opened his budget book during Monday morning's workshop when Commissioner John Bell, followed quickly by Commissioners Andy Anderson and Sandra McCullen, asked what would be involved in maintaining a revenue neutral tax rate that would avoid a tax increase.

"I, too, would like to see if we can work it out, a revenue neutral budget," Anderson said. "My concern is that we have a low economy and a lot of people have lost jobs. When people lose jobs, you lose revenues. Also, we have the revaluation this year and a lot of people are going to be hurt on that."

"I think we have to do it for our public and for our economy," Mrs. McCullen said.

Anderson asked commissioners if they wanted to hear Smith's suggestions before going through the budget.

"No. It is our budget now," Commissioner Jack Best said.

Smith said he already had been working toward cuts because he had been contacted by several commissioners prior to the meeting concerning no tax increase.

As result of the recent countywide property revaluation, the state required the county to advertise a revenue-neutral rate -- a rate that is estimated to produce revenue for the next fiscal year equal to the revenue for the current fiscal year if no reappraisal had occurred.

Using the state formula, the revenue-neutral rate for Wayne County would be 70.25 cents per $100 in property value.

However, in his budget message presented last week to commissioners, Smith recommended that the current property tax rate be reduced from 76.4 cents to 72.6 cents which in effect is an increase of 2.35 cents.

Smith originally said the approximately $1.3 million that would be generated by the proposed increase would be eaten up by reduced state funding for the Department of Social Services and Health Department and a state-mandated increase to the state retirement plan.

Rather than look specifically at rates, Smith said he had looked at an actual dollar amount of about $1.4 million in cuts that would be needed to make the budget revenue neutral.

"So if we look at expenditures, and we can go more than $1.4 million, then we can actually reduce it (tax rate) below 70.25 (cents) and actually below revenue neutral," Keen said.

"Correct," Smith said.

However, Bell cautioned that the board needed to keep in mind that there are a number of capital projects.

"If we start talking about going below revenue neutral, then we are going to have consider all of the capital projects we have on board right now whether we are going to cut more or not," Bell said.

Best responded that if commissioners were going to cut one thing then "everything is on the table."

Bell said commissioners wanted the projects and that the county could not do them and cut taxes.

At one point in the deliberations Best noted that commissioners have areas they try to protect from cuts. He even quipped, "Where are the Republicans when you need them?" an apparent reference to the Republicans' reputations as budget-cutters.

While reductions were the order of the day, the board did agree to one addition -- $25,000 for a "soft skills" instructor at Wayne Com-munity College. Commission-ers said the program would complement employee-skills training programs.

The $158 million budget reduces the solid waste user fee from $60 to $45. It does not provide for any across-the-board salary increases while maintaining the county's hiring freeze.

Smith would utilize the hiring freeze, along with eliminating 11 positions, to help generate some of the savings needed to prevent the tax increase.

Using the freeze to delay hiring people until absolutely needed would help save money, he said.

Best praised Smith for his budget management that he said has enabled the county to save money while paying cash for several purchases.

There were eight people in the audience including Republican Party Chairman Bob Jackson. Most left before the meeting ended.

As Jackson was leaving, Best asked him for his thoughts on what he had seen during the meeting.

"You are talking $1.4 million out of $158 million -- you are not even talking about one percent," Best said. "So when you think about going revenue neutral it really is kind of not immaterial, but it is almost immaterial. My question to you is do you want us to continue to be a strong county financially, speaking from the public standpoint?

"Or do you want us to sit here and twiddle away at meaningless things. ... It looks like we spent five hours sitting here this morning to get a million dollars out of a $160 million budget. I don't know what the word is, but it is kind of stupid."

Cutting 10 percent and cutting services is another thing, he said.

Best said he had looked at his revaluation notice and had been called by two people who were concerned about theirs. Evans and Bell said they had heard little as well. Anderson did not cite a number, but said he had received calls as well.

Probably less than 35 people have called to complain, Best said. He asked Jackson to comment.

"I see a lot of people hurting financially in the county right now," Jackson said. "What I get asked most, and they expect me to be informed to be able to answer, is, in my personal case, my income has probably gone down by half. I still survive, but a lot of people are just wondering how to deal even where they are."

Not having a tax increase would be good for the community and would provide a boost in morale, he said. He said there were probably a lot more people upset than the 35 mentioned by Best.

Best asked Jackson if he was willing to see a million-dollar cut in the school budget. Jackson said he was not prepared to comment on that. He did say that it could be done and that charter schools are an option. Best said he, too, supported charter schools.

"What you really get down to cutting next is services, big time," Best said. "That is what I am asking. Our county is in excellent shape and is financially sound. This board has made extra effort to allow Mr. Smith to do some things and to save some money so we can do some things for our citizens.

"The question I have is should we not continue on that route?"

There should be adjustments based on where the economy is, just as is being done in Raleigh, Jackson said.

Best also asked what services Jackson would like to see cut. Jackson said he could not address that.

"You have the budget sitting right there," Best said.

Jackson reiterated that he was not ready to make that recommendation.

Best said that the county needed more people who care and thanked Jackson for attending the meeting.