By Jessie Burchette
jburchette@salisburypost.com
County revenues ó including everything from the sales tax to building permit fees ó are in a free fall with no end in sight.
In a typical year, the county has $4 million to $5 million from growth in property taxes, sales taxes and fees to spend on new projects, employees or expansions.
But like most families in Rowan, the year ahead for the county is about trying to get by and hold on.
County Manager Gary Page spelled out the grim revenue situation on the first page of his budget message to commissioners.
Page released the budget message along with hundreds of pages of budget material Monday evening.
Virtually every category of revenue is down. These include:
– The county’s property tax base grew by 1 percent, generating $687,000 in new property tax revenue. Typically, the growth rate is 4 percent, which would have generated $2.8 million. This past year, the property tax base grew by 2.6 percent.
– Sales tax collections have fallen 8 percent, or $1.8 million.
With the Medicaid relief swap, the state takes one-quarter of 1 cent to pay the Medicaid cost previously assigned to counties. Due to the downturn in sales and the Medicaid swap, the county expects to receive $14.8 million in the next fiscal year, a decrease of $6 million from the current year.
– Interest rates have fallen 70 percent in the past year, resulting in an $800,000 loss of investment earnings.
– Revenue for building permits and septic tank permits has fallen 45 percent from last year, resulting in a loss of $587,000.
“This is the most constricted budget I’ve ever seen,” Page said. It’s his first budget as Rowan County manager, but he’s been a county manager for 32 years across North Carolina.
He began work here May 12, 2008, after a 12-year stint in Wilkes County.
Although there have been some economic downturns in the past 20 years, Page said he has never seen a period of no tax growth before.
Although the proposed budget includes spending of $7.4 million from the county’s savings, Page hopes the county won’t spend more than $3 million.
Historically, county departments have spent around 95 percent of their total budget, leaving millions unspent each year to revert to the fund balance.
In the current year, the county appropriated $8 million in savings to balance the budget.
The county will spend at least $2 million of that $8 million, cutting the county’s fund balance to $20 million.
Page said the county could end up spending another $3 million next year.
“When you start a downward spiral, it takes five or six years to build it back up,” he said.
Concerned about how long it could take the economy and revenue to recover, Page said the county could face more years of spending fund balance to maintain services.
Page said this year has turned into crisis management, trying to plug the multi-million dollar revenue loss.
The upcoming budget is about trying to maintain services with less money.
County commissioners will have the final say on spending.
They have budget workshops upcoming on May 27 and May 28 at 3:30 p.m. in the Cohen Administrative Offices Building, 130 W. Innes St.
Contact Jessie Burchette at 704-797-4254.