The New Hanover County manager has proposed a $306.6 million operating budget for the fiscal year that begins July 1, but changes are likely before the final budget gets passed.The part that would most affect county residents — and is most likely to generate opposition from commissioners — is a 5-cent increase in the property tax rate.
County Manager Chris Coudriet recommends increasing the tax rate from the current 55.4 cents per $100 of property value to 60.4 cents to cover the cost of repaying bonds that will come due this year on parks and Cape Fear Community College. Voters approved the bonds in 2006 and 2008, and when they did they also agreed to raise taxes if necessary to pay for the projects.
In addition to operating expenses for ongoing government functions, the budget also includes allocations for separately administered functions such as the fire district and environmental management, for total spending of $350 million.
The budget includes a net total of six new positions, although Coudriet recommends 11 new positions for Social Services. Nine of those positions would be filled by rearranging jobs as part of the health and human services merger, which involves the health department and DSS.
Other highlights of the budget include:
— A slight decrease in the fire service tax rate for residents of the unincorporated county, from the current 7.9 cents to 7 cents per $100 of property value.
— A reduction in the landfill tipping fee from $55 to $52 per ton
— Public school spending of $74.7 million, an increase of $4.1 million over the current year but less than $5.1 million the school board is seeking. The contribution represents the local share of the schools’ budget, including capital and classroom needs. The schools get about 60 percent of their budget from the state.
— A 1.7 percent cost-of-living increase for county employees plus a 2 percent pool for merit raises.
The operating budget represents a 1.3 percent increase over the current year’s budget, but some commissioners say they’re not convinced that it is as lean as it could be.
Skip Watkins said he spent considerable time poring over the budget line by line, and he thinks the commissioners could balance the budget without raising property taxes. Although approval of the parks and community college bonds come with an implied tax increase, he said, growth in the tax base and sales tax
“I don’t think you will see [a 5-cent tax increase]being the final result,” he said.
He commended Coudriet and his staff for following the policies set by previous boards of commissioners. This board, which has two new members since December, may decide on a different direction, he said.
But board Chairman Jonathan Barfield said there is another consideration: “what happens if we don’t raise taxes.” Since Barfield joined the board in 2008, the commissioners have increased property taxes only once, he said. The board increased taxes 1.3 cents in 2010-11 to make up for revenue lost as a result of the recession and its aftermath.
The county’s tax base decreased $5 billion during the economic downturn but is coming back, as is business and sales tax revenue.
Like Watkins, Commissioner Woody White, who has long been a vocal opponent of adding to the county’s debt load, thinks there is a way to balance the budget without a property tax increase. Among other things, he’d like to explore the possibility of paying interest only for a few years, until some of the older debt falls off.
The full impact of the $160 million school-bond debt, combined with the parks and community college bonds, will be felt in the 2019-20 budget year, he said. After that some of the debt begins to fall off.
He also supports relaxing the policy to keep the fund balance at 21 percent of the total budget for a few years to pay for some one-time needs.
Some of that money could be used for projects such as extending water and sewer lines up the U.S. 421 corridor to the Pender County line, White said.
“I feel perfectly comfortable taking the savings account to 15, 16, 17 percent, with a plan to pay it back,” he said.
For example, The budget includes the $12 million water and sewer project as one of several expenditures aimed at attracting business growth. Using part of the fund balance would make sense there, he said. On that project White agrees that the county should bear the greatest cost, but he’d also like to see participation from the city of Wilmington and New Hanover County.
Contacted Thursday before the board received the budget, Commissioner Beth Dawson said her first priority was to avoid a tax increase if at all possible. The focus, she said, should be on covering actual needs as opposed to items that would be nice to have if the fiscal picture were brighter.
The board will begin initial discussions at 4 p.m. today, but a final vote on the budget is not expected until June 22. Residents will get a chance to comment on the spending plan in a public hearing scheduled for June 8.
“I look forward to a robust conversation tonight from all five commissioners,” Barfield said.
email Tricia Vance at [email protected]