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Supervisors continue work on budget

Posted on Friday, March 29, 2013 at 3:18 pm

MILFORD – The Board of Supervisors is nearing completion of work on the fiscal 2013-14 budget, and it appears they will craft a spending plan that does not rely on tax increases recommended by County Administrator Charles Culley.

The board held a budget work session Thursday, the second one it has held in a week. The supervisors have not yet voted on the budget or to set the tax rates for the next fiscal year, but they are forging consensus in a number of key areas.

Culley proposed a budget back in February that would increase the general fund budget about 6 percent – $2.3 million – to $42.4 million for the fiscal year that begins July 1.

The increase is necessary to pay for a 3 percent raise he recommended for county employees, increasing debt service, a handful of new jobs, and some rising costs the county has little or no control over.

To make up the additional revenue needed, Culley recommended raising the real estate tax rate from 72 cents to 77 cents per $100 of assessed value and increasing the personal property tax rate from $3.50 to $4.30 per $100 of assessed value.

During their budget work sessions, the supervisors have indicated they are in no mood to increase taxes this time around. They raised the real estate tax rate in each of the last two years and also raised personal property taxes last year.

In modifying Culley’s proposed budget, the supervisors are relying on more recent financial projections that show increased revenues. For example, county officials now anticipate collecting an additional $332,000 in personal property taxes next fiscal year based on reassessments. They also expect to collect more in public service taxes and delinquent real estate and personal property taxes.

The supervisors are considering increasing the personal property tax rate, but only enough to ‘equalize’ the amount of revenue the county currently receives in personal property taxes. The overall assessed value of motor vehicles in the county has been stable or even increasing in recent years. In addition, Commissioner of Revenue Sharon Carter is changing the valuation of motor vehicles from the ‘clean’ retail category as used by the National Automobile Dealers Association to the ‘clean’ trade-in value. The net effect is that overall motor vehicle values will decline, but not as much as Culley based his original budget. In order to collect the same amount of personal property tax revenue, Carter recommended the supervisors set the rate at $3.79 per $100 of assessed value.

The updated personal property data was presented to the board Thursday night. Using those figures and an ‘equalized’ tax rate of $3.79, a random sample showed that many residents should get smaller personal property tax bills, noted Supervisor Jeff Sili. “Based on what we’re seeing, we’re giving everybody relief,”

The budget in the making also relies on transferring $706,000 from uncommitted monies in the county’s general fund balance. That’s up from Culley’s original recommendation of dipping into the general fund balance for $616,000. However, the net impact to the county’s fund balance will only be $28,000 according to Culley. That’s because county officials now expect to collect $500,000 in the current fiscal year from the prorated collection of personal property taxes and an additional $178,000 in personal property tax revenue next fiscal year.

Cully also originally proposed discretionary spending increases totaling $981,000. The supervisors tentatively have agreed to lop off $673,000 from that total; they eliminated funding for a general reassessment (pushing it back a year or two), debt service to buy 10 new sheriff’s vehicles and other vehicles for fire-rescue, utilities, and parks and recreation, two new positions for the department of social services (they funded two other new positions), and a new utilities position, and equipment for new sheriff’s vehicles. They also cut in half the School Board’s request for $103,000 to purchase new buses.

Besides $51,000 for new buses, the supervisors tentatively have agreed to fund the school division an additional $475,000, plus let the school division keep another $119,000 that would have been used to reimburse the sheriff’s office for two school resource officers – a total of $594,000. Coupled with $264,000 in state aid for the school division earmarked for raises, that will allow the School Board to give a 3 percent pay raise to all school employees.

The School Board requested an additional $1.6 million more than it received in the current fiscal year.

The supervisors briefly discussed whether to raise real estate taxes in order to add more to the fund balance, but they do not appear willing to raise the rate three years in a row.

Supervisors Floyd Thomas and Wayne Acors noted that the county will have new anticipated expenses in a year or two – for example, more sheriff’s vehicles, school buses, a new radio system.

Acors suggested the supervisors begin dedicating some of the fund balance to retiring debt. It would be a “terrible injustice” to impose a steep tax increase in one year to pay for the anticipated future expenses, he said.

Sili suggested the supervisors review the county’s financial condition in about six months. There are signs the economy is improving, he suggested, and the county will be reaping revenue from some new businesses.