Council resumes

Published 2:09 am Sunday, June 1, 2008

By Staff
its budget labor
Another session
slated for today
Contributing Editor
As Washington’s mayor and City Council hold work sessions regarding the city’s proposed 2008-2009 budget, efforts to avoid implementing that proposed spending plan’s call for a three-cent increase in the property tax rate continue.
Those efforts continued last week before and after a public hearing on the proposed $62.4 million overall budget. The existing budget is at $69.3 million. Most of the difference between the existing budget and proposed budget is the $6.33 million in capital-project funds, including $5.58 million associated with the city’s new fire station.
The proposed general-fund budget for the next fiscal year, which begins July 1, is at $15,168,755. The current general-fund budget is at $15.7 million.
The proposed increase in the property-tax rate would put that rate at 63 cents per $100 property valuation. That means the tax on a $100,000 home would increase from $600 a year to $630 a year.
The council meets at 4:30 p.m. today to continue its budget work.
At the suggestion of Councilman Archie Jennings, the council is looking at one option — among several — that could help it avoid increasing the tax rate. That option is delaying some significant capital expenditures for a year to two. Capital expenditures include major equipment purchases such as new vehicles and constructing new buildings, water lines and sewer lines.
A penny on the existing tax rate of 60 cents per $100 valuation generates about $55,000 in revenue. Delaying a capital expenditure of $165,000 for a year equates to a not increasing the proposed budget by three cents on the tax rate for that fiscal year, Jennings explained.
Mayor Pro Tempore Doug Mercer agreed with Jennings’ explanation, but he said delaying that expenditure would be just a one-time savings because that expenditure would be added to a future budget. Mercer said the city needs to find ways to cut expenses and increase revenues that will remain in place for years to come, not just one year.
Jennings concurred. He also suggested the city consider using revenues that would be generated by annexation and the revaluation of property taxes to provide the money needed to pay for capital expenditures the city delays for one or two years. It would take about two fiscal years before the city would realize significant revenues from annexation and revaluation, Jennings acknowledged.
He’s convinced the city can avoid a tax increase if the council works hard at doing so.
Beaufort County is in a revaluation process. The values of many properties in the county are expected to increase, meaning revenues generated by property taxes on those properties could increase. After a revaluation, most local governments adjust their property-tax rates so they are revenue-neutral. That means if property values go up, the local government decreases its tax rate so it generates the same amount of revenue the previous tax rate generated when it was applied to the former property values.
City Manager James C. Smith explained that after a revaluation, about one-third of the property owners see their property taxes increase, another third see their property values remain about the same and the final third see their property values decline.
At last week’s budget session, Mercer reminded the council and city officials he’s still waiting for a copy of the city’s capital-improvements plan. Mercer said having a long-range CIP would help the council with its budgeting process because it would know what capital projects are planned for coming years, allowing the city to budget accordingly.
That CIP, which is being updated, won’t be ready for several months, Mercer was told.
Mayor Judy Meier Jennette and council members Richard Brooks, Darwin Woolard and Gil Davis also have expressed their commitments to cutting costs and finding other revenues sources to develop a balanced budget.