A taxing budget plan

Published 1:31 am Tuesday, May 10, 2011

Commissioners mull 5-cent increase in property tax rate

Property taxes in Beaufort County will rise by five cents per $100 valuation under a 2011-2012 budget proposal presented Monday night to county leaders by County Manager Paul Spruill.

County residents would have a chance to turn back 1.5 cents of that proposed increase if they approve a sales-tax increase in a May 2012 referendum also proposed in Spruill’s budget.

The Beaufort County Board of Commissioners likely will spend the next month debating Spruill’s recommendations before adopting a new spending plan by July 1.

As foretold in Spruill’s 2010-2011 budget recommendation, the 2011-2012 proposed budget does not appropriate any money from county savings, also known as fund balance, to help balance the upcoming budget.

“Our fund balance cannot drop again,” Spruill said. “In this budget, we have no access to the $2.2 million we used from our savings last year.”

“Without robbing depleted reserves, the recommended budget includes a combination of spending cuts and a five-cent tax increase with a voter option to pass a sales-tax increase in exchange with some property-tax increase,” Spruill said.

Under the 2011-2012 budget proposal, a property owner would pay $1,100 in property taxes on a home with a taxable value of $200,000 as opposed to the $1,000 that property owner currently pays.

If a sales-tax increase is approved, that property-tax bill would drop from $1,100 to $1,070 on July 1, 2012.

Should that referendum be included by the commissioners as part of the 2011-2012 budget, it would increase the local sales tax from 7.75 percent on each retail purchases to 8 percent č matching the sales-tax rate in neighboring Pitt County.

The 2011-2012 proposed budget trims the county government’s work force č which has been cut by 22.5 positions, or 7 percent, in the past two years č by one position.

It also includes a two-day work furlough in the coming year for county employees č down from the current year’s five-day furlough.

In the past 10 years, normal growth in the tax base of as little as 2 percent would have been sufficient to offset some of the anticipated increases in retirement and hospitalization costs for county employees.

As a result of the continued economic downturn, the proposed 2011-2012 budget anticipates no growth from normal revenue over the current 2010-2011 budget, a move that Spruill described as “unprecedented.”

Spruill’s proposed county budget for 2011-2012 is $50.94 million, some $1.69 million, or 3.2 percent, less than the county’s $52.63 million budget for the current fiscal year.

About $900,000 of these cuts will result in some lost revenue to the county č such as a reduction in the hospital debt service that will be retired, but which is also offset by a loss in revenue from the hospital’s current lease payment, Spruill said.

The budget includes about $800,000 in cuts in county-department appropriations as follows: An $80,000 in savings from the elimination of a physician extender II position at the Beaufort County Health Department; a savings of $198,294 from postponing debt on an industry-ready building; a cut of $115,000, or about 1 percent, to the Beaufort County Schools’ local current-expense budget; a cut $20,000, or about 1 percent, to the county’s appropriation to Beaufort County Community College; a cut of $45,000 to local funding of subsidized day care for working families; a cut of $24,500 to local foster-care appropriations; a cut of $39,105 in solid-waste expense; a cut of $57,000 in the net cost of professional contracts; and a $7,800 across-the-board cut to the county’s travel and training budget of $80,000 for all departments.

The proposed budget also includes a cut of $565,206 in funding for school-construction projects to be offset by direct appropriations to the county schools from lottery proceeds.

“I have every expectation that the North Carolina General Assembly will make every effort to ensure that Beaufort County benefits from its historic share of lottery proceeds in the full amount … as opposed to the drastic reduction proposed in the governor’s budget from earlier this spring,” the Spruill’s budget message reads.

Spruill’s recommended budget cuts come on the heels of several actions taken in the past 24 months to trim county spending.

Previous cuts have included a five-day work furlough that reduced employee wages by 1.9 percent across the board and the 7 percent reduction in the county’s work force that not only eliminated positions but cost 12 jobs.