SALISBURY — Utilizing one-time funding sources while anticipating positive sales tax revenues and property values to increase, Rowan County Manager Aaron Church last week recommended a 2022-23 budget that does not raise property taxes and uses savings to balance revenues and expenditures.

The budget must be approved by the Rowan County Board of Commissioners in advance of the new fiscal year starting July 1.

The recommended budget spends $187.78 million, which is a $14.56 million or 8.41% increase over the current budget. Church is recommending a $9.3 million appropriation from the county’s fund balance to balance the budget, which is $3.1 million less than last year’s approved fund balance appropriation of $12.4 million, a 24.99% decrease.

The property tax rate will remain the same at 65.75 cents per $100 valuation.

In his budget message, Church says it’s possible to proceed “without a tax increase” because the recommended budget uses $10 million in American Rescue Plan Act funding and $3 million from a property sale to cover a number of expenditures.

Those two one-time funding sources will help cover a $2.1 million bond issuance for Rowan-Cabarrus Community College to build new facilities, about $3.5 million in principal and interest for $55 million in debt for Rowan-Salisbury Schools, $1.5 million for an increase in operating expenses for RSS and about $881,000 in principal and interest for an agricultural center at West End Plaza. The funding will also allow for five new positions, fuel and utility increases totaling $1.2 million and $5.7 million in cost of living adjustment expenses.

Accounting for consumer prices that have risen more than 8% from a year ago, Church is recommending a 9.4% cost of living adjustment (COLA) increase for every county employee. If inflation continues and the consumer price index exceeds 9.99% by November, Church recommends an additional 1.6% COLA increase effective Jan. 1, 2023.

“Our employees are dedicated, valued and they are my heroes and they do what a lot of people can’t do or aren’t willing to do, from working on Christmas Eve to Thanksgiving, on holidays and being away from their families,” Church said. “Right now, they’re short-staffed, they’re working overtime.”

Filling empty jobs has been difficult for many employers lately and the county is no exception. As of April 19, the county government had 89 vacancies, of which 36 were public safety positions. Around the same time a year before, there were only 38 county-wide vacancies.

Church said it’s critical for essential county employees to feel “compensated and appreciated,” whether they’re deputies or social service workers.

Even though the recommended budget projects sales tax revenue for the next fiscal year to be $33.7 million, a $4 million or 13.57% increase over the 2021-22 budget,  Church’s budget message warns of what could happen in a worst-case scenario:

“On May 24, 2022 Billionaire Pershing Square hedge fund manager Bill Ackman said, ‘There is no prospect for material reduction in inflation unless the Fed aggressively raises rates, or the stock market crashes, catalyzing an economic collapse and demand destruction.’ If a version of Ackman’s prediction materializes, it is possible that we could lose up to 50% of our sales tax which would equate to approximately $16,850,000.”

If that occurs, Church said “deep cuts” would be required, including the elimination of “approximately 100 plus full-time positions and reduced funding to schools for years to come.”

Along with counting on sales tax revenues to remain strong, Church’s budget hinges on property values increasing when the county’s property revaluation is completed in early 2023. Based on today’s economic climate, the county’s tax assessor estimates values could increase by as much as $4 billion, which would generate $20 million in additional revenue for the county.

If the new property values do not create at least $15.28 million in new revenue, Church says taxes will need to be raised or “across the board cuts will have to be made” for the fiscal year 2023-24 budget.

Funding for Rowan County schools makes up approximately $60.2 million or 32% of the recommended budget, including $47.6 million for operating expenses and $12.55 million for debt services. When it comes to operating expenses, that’s a $2.28 million or a 5% increase over last year.

Here’s how operational funding breaks down for educational institutions:

• $4.27 million for Rowan-Cabarrus Community College
• $38.2 million for Rowan-Salisbury Schools
• $2.89 for Kannapolis City Schools
• $2.2 million for charter schools

The $4.3 million recommended for RCCC is about $10 million less than the college requested. The $38.2 million for RSS is about $3 million less than requested.

In addition to the $10 million in unrestricted ARPA funding used to cover various expenditures, the recommended budget plans for using about $4.6 million for public health, broadband and infrastructure. That will leave an estimated $7.9 million remaining.

The recommended budget includes 22 vehicle purchases, including four for emergency services, three for transit and 15 for public safety.

Of the five new positions created in the budget, three are for animal services, one is for planning and one is for building inspections. There were requests for 58 new positions.

The budget includes $2.3 million for one-time capital items. The largest capital purchase is $750,000 for a roof replacement at Rowan County Facilities. There is also $430,000 for the animal shelter road, $450,000 for the library roof and $250,000 for information technology storage.

Commissioners will hold a public hearing on the proposed budget at 6 p.m. on June 20. Each speaker will be limited to three minutes to address the board. Comments will be restricted to the budget.

The proposed budget for the 2022-23 fiscal year is available in the Office of the Clerk to the Board of Commissioners, room no. 202 on the second floor of the Rowan County Administration building at 130 W. Innes St. The budget is available online at rowancountync.gov.