Overburdening the county purse strings

Published 4:25 pm Friday, September 23, 2016

The median price of a home in Beaufort County is $117,500. The taxes and fees levied on the owners of these homes increased 10 percent in the last year, but even with $2.75 million in new revenue the county’s budget for the coming year points to a $920,000 deficit.

From 2010 through 2014, county budgets averaged $53 million. The current budget is $60 million. In 2014, Beaufort County had 316 employees, $13.0 million in salaries, and $3.8 million in benefits. Today the budget authorizes 369 positions, $15.9 million in salaries, and $4.9 million in benefits. In just two years the commissioners have given approval for hiring as many people as we have in the sheriff’s department, at an increased cost of $4 million in salaries and benefits.

Does any of this resemble a county being managed “without overburdening the county purse strings?”

Not really.

The commissioners have voted appropriations for everything from private contractors for courthouse security to an unwelcomed attempt at highjacking the City of Washington’s EMS program. The budgetary process is heavily influenced by the financial philosophy of career bureaucrats, and characteristically bases its spending on political expediency rather than comparing expected costs with expected benefits. The budget cycle can be described as: hemorrhage cash; prescribe higher taxes; resume hemorrhaging cash. The spending fever persists; the patient never recovers.

County government’s expansion of taxes and spending has not resulted in an economic expansion. While the national economy has slowly improved since the recession, employment and labor force numbers in Beaufort County are down by over 1,000 people. Sales tax receipts, which indicate the value of local business transactions, grow at barely the rate of inflation. The City of Washington’s sales of kilowatt-hours have not increased in years. Construction of the large, job creating and high-tax-value real estate projects, i.e., Pamlico Plantation and Cypress Landing, is a thing of the past. The county’s population growth has stalled, and enrollment in the public schools fell between 2005 and 2016. The Beaufort County Industrial Park is a subsidy sump characterized by scavenger sales and empty lots. The Chocowinity Industrial Park, purchased in haste for all the wrong reasons, has remained completely vacant for 10 years.

Can it get any worse? Sure it can. The county’s largest employer, PCS, is in a slowdown and has reduced capital spending. Less capital spending means less commercial property subject to local taxes; consequently, more of the ad valorem tax burden will be shifted to homeowners and small businesses.

The county board has painted taxpayers into a corner. No county government can continue spending more than it collects in taxes. The problems caused by chronic deficits will become apparent with the revaluation in 2018, along with the tax hike that will accompany the revaluation. We’ve reached the point where rapid growth in the county budget has outrun what little growth the local economy can produce. This leaves a sluggish private sector facing higher and higher tax rates to pay for recurring government waste and accelerating government expenditures.

Warren Smith is a Beaufort County resident.