Commissioners seek to make up budget shortfall|Local governments affected by state cutting allocations

Published 4:02 pm Sunday, September 6, 2009

Staff Writer

The Beaufort County Board of Commissioners begin deliberating next week on how to make up for an estimated $618,500 shortfall in the county budget caused by cuts in appropriations by the N.C. General Assembly.
“That’s a lot to cut,” said Commissioner Stan Deatherage in an interview Friday.
Most of the cuts imposed on Beaufort County by the General Assembly when it passed the state budget in August directly related to education, public-safety and human-services expenditures.
The commissioners will hold a public hearing at 7 p.m. Sept. 16, at which time they will meet with representatives of various county agencies and the public to discuss ways to deal with the shortfall.
(The commissioners meeting, public hearing on the budget and a public hearing on a proposed no-wake zone for a section of Tranter’s Creek were scheduled for Sept. 14, but they were rescheduled to allow representatives from various county agencies to attend, according to County Manager Paul Spruill.)
“I don’t expect the county commissioners to take actions regarding this shortfall on Sept. 16,” Spruill said. “The commissioners will be seeking feedback from the staff, public and any agencies that may be affected by the cuts.”
The estimated cuts in county funding included in the budget adopted by the General Assembly are as follows:
• $380,000 in state shared corporate income tax allocated to counties based on average daily membership at local public schools appropriated to counties for school capital expenses. Beaufort County uses this money to pay a portion of the $2.8 million in debt from a school construction bond;
• $48,000 in reimbursements from the state to the county for housing state prisoners in the county jail;
• $50,000 in cuts from state contributions to the county for temporary aid to families in need;
• $80,000 in Medicaid cuts for case management of services for qualified elderly residents in Beaufort County;
• $43,500 in cuts from the county’s share of beer and wine excise taxes;
• $17,000 in cuts from state reimbursement to Beaufort County for providing office space for state probation and parole employees,
“The county’s responsibility at this point is to explore expenditure cuts or other revenue sources, if they exist, to bring the budget back into balance,” Spruill said.
One of revenue sources not available to the commissioners is an increase in Beaufort County’s property-tax rate, currently set at 60 cents per $100 valuation. Counties are prohibited from adjusting tax rates after they have been set for the fiscal year, he said.
County officials said they expected some cuts in state appropriations to the county, given the unprecedented shortfall in state funding that was estimated by some at $4.5 billion during this year’s legislative session. The commissioners are prepared to make some changes.
“We knew that it was coming,” Deatherage said. “Every appropriation we made during budget deliberations was based on funding availability and we let our department heads and others know it.”
Spruill agreed that some type of shortfall in county spending was expected.
“Due to the state’s unprecedented fiscal challenge, Beaufort County adopted its budget with the knowledge that we might have to address certain adjustments that the state would pass down to us,” he said.
Unlike the federal government, North Carolina and its counties are required by state law to operate with a balanced budget. Minor budget adjustments throughout the fiscal year as a result of changes in cost or revenue are routine.
The shortfall in the 2009-2010 budget requires more deliberation than routine budget adjustments.
Spruill said he expects to recommend some cuts to the commissioners when they meet next week.
Meanwhile, Deatherage said he expects lengthy debates among commissioners in regard to those cuts.
“There will be some fights,” he said.