EDITORIAL: County’s budget reflects difficulty of fiscal picture

May. 23, 2013 @ 05:00 AM

Republican members of the Lee County Board of Commissioners pledged early on — even during the campaign season — to cut the county’s property tax rate. County Manager John Crumpton’s proposed budget for fiscal 2013-14, presented to the commissioners this week, makes it more or less official that a lower tax rate will become a reality for county residents: the budget is based on a rate of 72 cents per $100 valuation, down from the 75 cent rate the county’s had for the last six years. Commissioners will work on the proposed budget over the next few weeks and pass a final budget before the end of June for the fiscal year that begins in July.

Crumpton’s budget, as outlined in his written budget message to commissioners, factors in both the county’s new property revaluation (which increased the tax base by 12.4 percent over the last revaluation in 2007) and the additional revenues from the much-debated change in distribution of sales tax receipts. It was the latter event, of course, which essentially allowed the commissioners to keep their property tax reduction promise. (City Manager Hal Hegwer’s proposed budget increases the city’s ad valorem tax rate by four cents, or seven cents based on a revenue-neutral calculation, related to that change.) But Crumpton, and the commissioners, still face difficult decisions in their mandate to keep Lee County fiscally healthy.

The financial challenges the county faces are significant. Consider:

• Continuing reductions in state and federal funding to the county, combined with sales tax receipts that remain sluggish in a recession-driven economy, make it more difficult for Lee and other counties to simply maintain the status quo when it comes to providing county services and public safety. Both the state and the feds are passing along mandates to the county, but not necessarily the funding to make them happen. So Lee, like many counties, must pay for additional personnel to perform the jobs and services required by state and federal mandates.

• The county has resorted the last few years to using cash from its fund balance to help with operational costs, a practice which is impossible to sustain. While the state of North Carolina recommends counties keep a fund balance (used as a “rainy day” fund would be used) of at least 8 percent, Lee County’s goal has been 14 percent. In order to meet that goal, finding funding to meet human services programs’ needs and funding for major capital purchases will be difficult, even with the $2.7 million Crumpton proposes using this coming year from the county’s reserves.

• To provide requested increases in funding from Lee County Schools, the county would have to raise its property tax rate by 7 cents.

• Federal sequestration creates a moving target when it comes to revenues and expenses, and will continue to do so for the foreseeable future.

Those challenges notwithstanding, the county’s proposed budget does:

• maintain, as is the county’s responsibility, a high level of service and public safety.

• maintain current funding levels for LCS, minus the subtraction of two years of special funding (at $500,000 per year) for some teacher assistant positions.

• provide funds to complete existing capital projects, but not funds for any new projects.

• provide a 1.7 cost-of-living pay increase to county employees.

Crumpton himself said in introducing his budget that there were aspects of it with which he wasn’t pleased; commissioners have the unenviable, but duty-required, task of working through it before passage. A public hearing will be held to discuss the budget on June 3. To get your own look at the budget, visit the county’s website at www.leecountync.gov.