County budget plan: No new taxes
By Steve Herring
Published in News on May 24, 2009 2:00 AM
Wayne County's 2009-10 budget draft is a mixture of nos -- no tax increase, no fee increases, no pay raises and no employee furloughs. It also is lean on capital projects, as well as travel and training for county employees.
The budget continues the county's practice of not filling most vacant job positions -- a practice expected to save hundreds of thousands of dollars.
Commissioners had been on target to get their first look at the budget last week. However, the budget was pushed to the back burner just over a week ago when County Manager Lee Smith was notified that Moody's, the agency that determines the county's credit rating, would be reviewing the county's financial status.
The review was Thursday, and on Friday work resumed on the budget.
Now commissioners should get their first look at the roughly $160 million draft budget later this week, giving them some time to peruse it prior to their June 2 meeting.
The board is expected to hold budget work sessions, and Smith will ask for a public hearing during the week of June 15.
Smith estimates the budget deficit to be about $5.5 million to $6 million, roughly 9.5 cents on the county tax rate. The rate, however, will remain at 76.4 cents per $100 of value.
"I am not recommending any tax increase, nor any fee increases," he said. "As far as property taxes and fees, expect them to be the same, and that was generally from the board. It was their feelings they wanted us to live within the revenues that we had. I think that is appropriate for the economic times we all are facing and are in.
"If you look at the budget, the one thing we are working on real hard is not to cut personnel. I have looked at the draft and right now I think that is the case. I think that we can, through certain efficiencies, and making certain cuts. I think we have cut a lot of capital and operations for this coming year. I think we can make it unless there is something out there that I do now know about, and that is always possible."
During initial budget meetings, someone brought up using history to plan the budget.
But even though it matters, it doesn't because the rules have changed, Smith said.
"The way sales taxes are being collected has changed, the way they are being divvied out has changed, values are fluctuating, so we are living by new rules," he said. "The baseline is this year. We had one four years ago, but that baseline now is moving to this year."
Complicating the budget process has been a decline in sales tax revenues and the state's multibillion-dollar deficit.
"We are hearing from credit rating folks, financial advisers on the state and national level and those managing large local governments, they are saying this is a four-to-five-year process," Smith said. "We wanted to find ways to hold tight, put some projects off.
"The board has said that for the next two years that a tax increase is not an option. We try to plan for the next year, but we have got to get through this legislative cycle and what they (state lawmakers) are going to do."
Smith said it is not an exciting budget, adding that department heads had "done a good job" coming in with cuts.
"They have not been real emotional because departments knew we had to pull it off," he said. "I told them there will be no new revenue. They made the cuts."
There had been some speculation that the budget would recommend furloughs for county employees as a cost-cutting measure.
"Right now, I do not have furloughs in the budget," Smith said. "I was able to make enough cuts. I had looked at them to give $400,000 to $500,000 this year by 20-30 hours off for all employees.
"Does that mean that it can't happen? It all depends. We could get into the budget for next year and things could change. Some cities and counties did. But having pared back the budget over the past several years helped, so we did not have to."
He added, "We have cut the county budget for three years running, and had we not done that, we would have been in really tough shape this year because we would have had to have gone deeper, and some of these other things we have discussed would have been required that would have affected employees.
"One of the things we will talk to the board about is that we are going to look at benefits. Benefits in this matter -- a lot of folks, when you retire after so many years, you get benefits."
An example is health insurance, he said.
Smith will recommend to the board that any employees hired after July 1 not be eligible for certain benefits, including insurance, when they retire.
It will not affect existing employees.
New accounting procedures require the county to account for future retirement benefits as a liability on the county's balance sheet.
Those numbers, he said, are "huge."
"I don't know that we can afford to continue that," he said. "I just don't think that we can afford it. It will be tough on recruiting people, but some counties already have cut it out."
Smith said he continues to look at values in the county and that he has talked to local Realtors.
"Values have held fairly well," he said. "Some have stayed on the market longer, but in a comparison to the rest of country and other parts of North Carolina, Wayne County did all right on value.
"We are beginning to see Register of Deeds activity pick up a little bit, inspections a little bit, but it is still not where it was and I don't expect it to be for a long time, years probably."
However, there are a couple of positions open in the inspection department that will not be filled or funded next year, unless activity comes back to a point that enough revenue could be generated to justify filling them.
The budget draft also includes less for travel and training. Only travel required to maintain certification or qualifications to do a job like an inspector will be permitted.
"Those things pay for themselves in the long run," he said.
Rather than travel, Smith said the county would look at ways to save by utilizing Webinars or online meetings. Or, he said, it might be feasible to have multiple counties plan training sessions in one place and bring the trainer to that location.
Smith also is looking to save money through lower fuel prices that have been complemented by a vehicle idling policy and the streamlining of vehicle routes. Additionally, utility savings have been realized through the county's four-day workweek that has been in effect since last August.
Between fuel and utility, Smith is hoping to save more than $300,000.