Non-mandated services to take hit as commission approves half-cent cut
Union County residents will see a half-cent cut in their taxes this year. The only question is how the county will pay for it.
During a special session Monday, March 12, county commissioners learned that the original funding plan, to reduce the county’s fund balance or bank account by 1 percent, from 16 to 15 percent, would not generate as much as originally anticipated. In February, county manager Cindy Coto projected that Union would add $6 million a year by dipping into the fund balance. On Monday, she said it was unlikely the county could be debt free in five years as projected.
“When we looked at it, we thought we were a little optimistic with those scenarios,” Coto told the board. “Even with cash, you did not have sufficient funds based on the manager’s recommended funding level.”
If the county fills current needs, then it will see a shortfall of an estimated $55 million by the end of five years. By staying at status quo, without any additional staff, raises or increased budgets, that shortfall drops to $20 million. With the manager’s recommended budget, that number climbs to $33 million. With little benefit from dipping into the fund balance, county commissioners agreed to leave it alone by a unanimous vote.
“It seems the logical thing to leave it alone for the time being,” county commission chairman Jerry Simpson said.
But with that vote came another question. During the same meeting, county commissioners voted 3 to 2, with Tracy Kuehler and Kim Rogers in opposition, to authorize a half-cent property tax cut in each of the next two years. Without dipping into the fund balance, the county has to decide how to afford the drop in revenue.
The half-cent tax cut will give most residents between $10 to $20 back. For a $200,000 property, the owner would get $10 back. For a $400,000 house, that would increase to $20.
Rogers cited lack of revenue as the reason why she opposed the tax cut.
“We’ve got (more than $500 million) plus in debt, the highest debt per capita,” Rogers said. “I think you’re disabling the government. To take a tax rate and cut it, with the amount of debt we have, with the amount of deficit we have, it doesn’t seem feasible to me.”
Instead of cutting the tax rate, Kuehler suggested the county take the $54 million they received for the long-term lease of CMC-Union and distribute it to the residents.
“Take the $54 million you’ve got sitting there and give everybody a stimulus check,” Kuehler said. “You could give them a heck of a lot more money now that they can shop Union with.”
Simpson argued that he felt a tax cut was needed, as that was the biggest thing he heard while running for office.
“The biggest thing I heard during my campaign was that these taxes are killing us,” Simpson said. “The more that goes to the government, the less that’s available for the private sector. To me, this is a huge ship (and) it’s difficult to turn, but you’ve got to start turning it somewhere,” Simpson said. “To me, the place to start turning it is that tax rate and hope that our economy recovers and our revenues increase as a result.”
Coto presented a list of non-mandated services to the board, things the county isn’t required to do by the state. That list included funding parks, libraries, veterans services, nutrition, transportation and operating a cooperative extension.
“I had made assumptions that some of these services are mandated, but they weren’t,” Coto said. “Veterans Services for example, there are actually some counties in the state that do not have veterans services offices.”
Also, Coto said the county could cut back on the number of early voting sites it currently offers. Union pays for four sites currently, selected by the Board of Elections. The state only requires one.
“I think we can easily get away with two sites,” county commissioner Todd Johnson said, pointing to the Monroe Board of Elections office and the Wesley Chapel fire station, operated on New Town Road, as his two preferred choices.
Additionally, Coto brought up the fact that all fire investigations aren’t done by the fire marshal’s office. Some departments choose to handle some investigations themselves, as well as conducting pump testing on their own, as opposed to requesting the county’s help.
All total, non-mandated services account for $6.71 million or 3 percent of the general fund budget for the county each year.
No extra money for schools?
County commissioners also took a hard line when it came to dealing with the school district. Coto said she met with Superintendent Ed Davis and expressed that there was no money from the county for school capital needs in the five-year forecast.
“He did not voice to me a concern,” Coto said, adding that she and Davis had a handshake agreement during budget discussions last year to spread school cuts over a two-year period and he seemed to accept that.
Overall, Union County Public Schools would see no increase in funding from the county until 2014, where a 1.5-percent increase is allotted, then a 2-percent increase through the remainder of the forecast up to 2017. Currently, 23 to 24 cents of every dollar collected by Union County goes to pay off debt service on school facilities.
“(It) just seems to me if we made an agreement, we met our end of the agreement and we’re into the second part, let’s finish the agreement,” Johnson said. “I have a kid in school this year, I have another kid in school next year, so I can definitely appreciate the value of education. That being said, where does the money come from? Does that come from a tax increase? We always hear more money for schools, but we never hear where it’s going to come from.”
Commissioners had authorized earlier in the meeting to examine land acquisition for a new building for social services and human services, as well as possible construction on a farmer’s market, 4-H pavilion and provide $3.5 million to help South Piedmont Community College renovate an existing building. Since the county could find money for those needs, Rogers asked that the county consider opening discussions again with the school district to see what immediate facility issues could be funded. That includes repair work on some of the older schools in the county.
“To not fund the school (capital improvement program) at all, I think we’re setting ourselves up,” Rogers said.
The motion to open discussions with Davis passed 3 to 2, with Johnson and Thomas opposed.