By Karissa Minn
kminn@salisburypost.com
SALISBURY — Rowan County’s proposed budget spends $4.1 million less than last year and increases the property tax rate by 2.75 cents, but both those numbers could change next month after local and state decisions.
Last week, County Manager Gary Page gave county commissioners copies of the $124.7 million budget, which cuts county departments by more than $2 million and schools by more than $1 million.
“This year’s proposed budget has been an attempt to match our revenues with expenses and to not rely upon the county’s fund balance as an ongoing ‘safety net,’ ” Page wrote in his executive summary. “Though difficult, the county’s financial well-being is on sound ground and we are going to be able to operate within our means.”
He wrote that most of the proposed cost savings have come through eliminated county positions, reduced hours and services for parks and libraries and no salary or benefit increases for county employees.
The proposed budget also increases the property tax rate from 59.5 cents to 62.25 cents per $100 of assessed value, but residents won’t necessarily see a big difference in their tax bills.
The county’s tax base dropped by about 3 percent after the 2011 revaluation, and it would have to raise the property tax rate by 2.5 cents to maintain tax revenue.
In an interview Thursday, Page said this isn’t the same as raising taxes because property owners would be taxed no more than they are now. Of course, different individuals might see their bills increase, decrease or stay the same.
“We’re not going to get more money from this,” Page said. “I still need $67 million in property taxes to make everything work.”
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The proposed rate hike also includes a quarter-cent property tax increase to pay for debt from a $12 million bond approved by voters last year. It would provide handicapped accessible improvements and new classroom space for students and local firefighters at Rowan-Cabarrus Community College.
Instead of levying a 1.25-cent increase all at once, commissioners voted in March to raise the tax by a quarter cent in the coming fiscal year, and an additional half cent in each of the next two fiscal years.
In light of this increase, commissioners have said they want to avoid raising the tax rate to revenue neutral. But that would come at a price in this third year of budget cuts.“If they don’t want to increase it by 2.5 cents,” Page said, “I’ll have to cut another $2.5 million.”
Fortunately, the pressure to either raise taxes or cut expenses could finally start to let up — as long as the state doesn’t apply its own.
Sales tax revenues are expected to go up by 1 to 3 percent in the next year, which Page wrote is a “much improved estimate” after a 10 percent loss over the past three years.
“In 2011, sales tax collections ‘leveled off’ and began to increase slightly,” he wrote. “Property tax collections have improved with a reduction in the unemployment rate. The general picture indicates that the economy and recession have possibly ‘bottomed out’ and we may be seeing slow improvement.”
Page said another good sign is the county is spending less of its fund balance, which he expects will stay at $17 million through next year because departments won’t spend all of their appropriations. The county would use $6.8 million in reserve funds to balance the budget, compared to $10.7 million last year.
But the county’s proposed budget might be quite different than the one its board approves next month. Not only do commissioners get a chance to tweak it, but the state’s own budget could force it to change.
In the coming year, Rowan County is budgeting $1.7 million in education lottery funds for school bond debt payments, assuming last year’s reduction from $2.6 million is permanent.
North Carolina is expected to withhold even more of that money and to shift millions of dollars’ worth of mandated expenses to the county. Legislators are still changing the state budget, though, so the right now the county can work only with what it knows.
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In the county’s proposed budget, Page recommends cutting 17 full-time positions and one part-time position. Most of these were eliminated through resignations, retirements and reorganization, but three county employees will lose their jobs.
They are an internal auditor in the finance department, an ordinance enforcement officer in the planning department and a part-time library assistant.
Page also recommends adding two new positions in the social services department — an income maintenance caseworker and a safety officer — that would be funded 52 percent with state grant money.
“These new positions are recommended as the result of increased demand for services from qualified clients and safety concerns at our East Innes Street facility,” Page wrote.
Funding to Rowan-Salisbury Schools is recommended to drop by $1 million to $31.8 million, and the county is required to change its funding to Kannapolis City Schools to the same per pupil amount.
Page wrote that the system should be able to withstand the county’s cut, and he expects it will rely on its $7 million in reserve funds to balance its budget.
“This fund balance has been accumulating for a number of years in order to help the district meet its demand for service during tough economic conditions,” Page wrote. “Over the next few years, we will need to help the school system maintain some level of fund balance in order to withstand future budget cuts from the state of North Carolina.”
Contact reporter Karissa Minn at 704-797-4222.
Budget highlights
Rowan County’s proposed budget for fiscal year 2011-12 would:
• Decrease the general fund budget by $4.1 million to $124.7 million.
• Raise the property tax rate from 59.5 cents to 62.25 cents per $100 of assessed value.
• Give no pay raises to full-time employees for the third year in a row.
• Maintain county-paid health insurance premiums at the same level but increase employee copays and deductibles.
• Cut 17 full-time positions and one part-time position.
• Add two new positions out of 23 requested.
• Add $161,000 in new budget items out of $2.7 million in requests.
• Cut $125,000 in nonprofit funding by reducing appropriations for some groups and eliminating them for Rowan Arts Council, Rowan Museum Inc. and the Salisbury-Rowan Human Relations Council.
• Cut funding for Rowan-Salisbury Schools by $1 million to a total of $31.8 million
• Cut funding for Kannapolis City Schools by $47,000 to a total of $1.9 million.
• Increase funding for charter schools by $10,000 to a total of $128,000.
• Set the average student appropriation at $1,565.50.
• Maintain funding for Rowan-Cabarrus Community College and count bond debt service as its capital outlay.