Carroll County will hold a public hearing June 13 on a proposed budget that will include tax rate increases of up to two cents per $100 of real estate valuation and 35 cents per $100 of personal property valuation.
Carroll County’s proposed Fiscal Year 2017 budget will be presented June 13 with matching revenues and expenditures of $41,151,149. That budget will also include a cut in the county’s local contribution to the Carroll County Public School System of $765,825 – down by nearly a quarter of a million dollars from the $1,007,673 reduction the county suggested a week earlier.
Interim Carroll County Administrator Nikki Cannon presented the proposed budget to the board of supervisors Monday night. She said the county faced several budget challenges this year, including a $1.25 million payment for the Phase III renovations of the county’s high school and middle school, increased costs in personnel expenses mainly dealing with health insurance, and the final $220,000 payment for the county’s 2017 reassessment. Capital needs in this budget include a new county phone system that will cost $350,000, as well as a fire truck and school buses.
“One of the biggest challenges we have is we don’t have the reserves for Carroll County to bridge that gap in the budget any longer,” Cannon said. “It has always been a budget philosophy that we don’t use fund balance to balance the budget. We have consistently done that over the past three years and those reserves are no longer there.”
She said that leaves the county with three options to balance the budget – increase taxes or fees, reduce services provided to citizens, or redistribute resources. She said the redistribute resources option was exhausted at the end of 2016 as the county cut expenditures in every area it could.
“Going into this budget I think all of us knew and were prepared that there might be a slight tax increase this year,” Cannon said.
Major changes in revenues for Fiscal Year 2017 include an increase of $1,421,327 for general property taxes, the majority coming from an increase of delinquent tax collections. The budget also proposes a reduction of $1,807,201 in miscellaneous revenue, which Cannon said is where the county previously used its fund balance to bridge budget deficits. The number was so much higher last year because the previous board used $1.5 million to cover the first Phase III renovations payment. Recovered costs are down $653,561, while revenue from the federal government is down $413,755 and revenue from the state is down nearly $40,000. In total, the Fiscal Year 2017 budget is $1,883,997 less than it was in the current budget cycle.
Any time the county talks about raising tax rates, it does a regional comparison to see where it stands with its neighbors. Currently, Carroll’s real estate tax rate of 66 cents is third-highest among the counties of Grayson, Bland, Pulaski, Wythe, Smyth, Washington and Floyd, and the City of Galax. On the flipside, Carroll’s current personal property tax rate of $1.95 is third lowest among those same localities. A one-cent increase in real estate taxes nets the county about $215,000, Cannon said, while a one cent on the personal property tax rate is worth about $18,000 to Carroll. She said the county started the upcoming budget with an astronomical shortfall (over $3 million at one point).
“But there were a lot of budget cuts in departments and agencies. Everyone bled a little bit this year, and bled pretty hard, to the point it felt like there wasn’t any more to be had without looking at real estate and personal property rates,” Cannon said.
Her recommendation was to raise the personal property rate 15 cents to $2.10, which would still leave Carroll third lowest in the region. She also recommended a one-cent increase on the real estate tax rate to 67 cents, which would leave Carroll the third highest.
On expenditures, Cannon explained there is a $239,595 increase for general government. She said that number is misleading because it includes $570,000 for the new phone system and reassessment, meaning a lot of cuts had to be made. Expenses for public safety are down $283,247, a number she called impressive considered a fire truck was included in that figure.
“The strides to get to these differences were astronomical,” Cannon said. “In education we had a $765,000 decrease. That is not all Carroll County Public Schools, but I will say that number was very hard to get to and was very helpful to the county in balancing this budget.”
In total, the county’s expenditures are down $702,099 for the proposed budget. Other big-ticket expenditure items in the budget include an economic development incentive of $200,000 to Vanguard Furniture and a debt service payment of $115,744 for Wildwood, a number the Carroll County Industrial Development Authority paid last year.
“So after meeting with the school (board) and readjusting our figures, we are pretty close to a $400,000 shortfall,” Cannon said. “In order to bridge that gap, the only option we had left at this point was a rate increase.”
Items not funded in the budget presentation include $425,000 for five school buses, $135,000 for architectural and engineering fees on an attached gym for Carroll County High School, and the second year of implantation for $550,000 for a Class A pumper for Cana Fire Department. The first year of implantation has yet to be completed, Cannon said, leaving the county’s total needs that were not funded at $1,110,000. She said she hasn’t given up hope some school buses could possibly be funded throughout this budget cycle in ways not originally budgeted for.
“It’s something we need to see come to fruition and we need, too,” Cannon said. “We can’t meet our own CIP needs at the county. Capital is first thing to go when money gets tight because nobody wants to see a tax increase.”
Cannon said financing five school buses annually would cost about $52,000, while financing a Class A pumper would be about $64,000 a year. Combining those with A&E fees for CCHS would bring Carroll’s total needs from $1.1 million down to $251,566 a year.
“I would like to remind everyone we reduced the real estate tax by two cents and I really feel like that probably was a mistake,” Supervisor Dr. Tom Littrell said of the current fiscal year. “One cent is not even back to where we had been. I’m almost thinking back to where we had been would be a good move to get back to some of these projects taken care of.”
Before moving forward, supervisor Bob Martin said he’d like to hear from the school system about the $765,000 cut to education. Carroll County Superintendent of Schools Dr. Strader Blankenship said he understood it’s been a tough year.
“To tell you the kind of cuts you are talking about aren’t going to hurt, I can’t tell you that,” Blankenship said. “What I can tell you is we expect to be good members of the community as well. It is something we will all agree on and we will live with.”
At that point, Supervisor Phil McCraw made motions to approve the Carroll County Public School’s Operating Budget of $42,536,998, the school debt service budget of $4,815,172, the school system’s food services budget of $2,924,598, and a school textbook fund of $200,500. All motions passed unanimously.
Board chairman Joshua Hendrick said he felt Carroll should purposely advertise a higher tax rate than the county expects it to be, which would allow the county several options to rework some things. Counties are allowed to lower advertised tax rates, but not increase a rate once it has been advertised for public hearing. In that case, Cannon recommended a tax rate of $2.30 for personal property taxes and 68 cents for real estate. Supervisor Phil McCraw made the motion for the public hearing on the budget and those tax rates at the county’s June 13 meeting. Supervisor Robbie McCraw seconded the motion, which passed unanimously.
Allen Worrell can be reached at (276) 779-4062 or on Twitter@AWorrellTCN