06/07/17 — Tax increase looms for county

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Tax increase looms for county

By Steve Herring
Published in News on June 7, 2017 6:56 AM

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Ruth and Dan Cole were the only ones to comment during a Tuesday morning public hearing on the Wayne County budget proposal. They asked Wayne County commissioners to appropriate $21,500 for their nonprofit 4 Day Movement.

The possibility of a 2.46 cent property tax increase to replace lost school funding thus far appears to have failed to generate any public backlash.

During a Tuesday morning hearing on the roughly $150 million budget proposal, Dan and Ruth Cole Jr. were the only ones to comment asking Wayne County commissioners to appropriate $21,500 for their nonprofit 4 Day Movement.

Commissioners took no action on the request.

It is possible the tax increase will not be needed since Wayne County would receive $2 million in low-wealth funding for fiscal year 2017-18 should a state House budget amendment survive final approval by state lawmakers.

The stopgap measure is designed to give the state time to come up with a long-term fix to the low-wealth education funding formula, state Rep. John Bell of Goldsboro said.

Bell said he thinks the amendment will pass final muster.

Currently the allocation is based on a complicated formula comparing local tax rates to the average effective tax rate for North Carolina.

Wayne County's tax rate falls below the threshold and would cost the county $4 million in low-wealth funding over the next two years.

Wayne County commissioners Tuesday said they are pleased with the amendment, but continue to support a change in a state budget provision that would exempt the county from having to meet the low-wealth funding threshold.

The provision provides an exception for counties where military bases are located as long as the county schools have an average daily membership of more than 23,000 students.

In those cases, the schools would receive the same amount of supplemental funding for low-wealth counties that they received in fiscal year 2012-13.

Commissioners want to keep that provision in the final budget, but have the number reduced to 17,000 or 17,500 in order to fall under the exemption.

Wayne County's current average daily membership is around 18,826.

Neither the amendment nor the exemption provision are included in the Senate version of the budget.

With that in mind commissioners continue to pursue adopting an interim budget in order to forestall the possible 2.46 cent tax increase that otherwise would be needed to make up the loss of low-wealth funding.

Commissioners are expected to adopt a budget when they meet June 20 -- they just do not know yet whether it will be the full budget or the interim.

Adopting an interim budget would allow the county to continue to operate without having to adopt a tax levy until after it knows what the state will do.

If the amendment or revised provision make the budget, the tax increase would not be needed.

"It (amendment) fixes the problem," Bell said. "I met with Rep. (Nelson) Dollar, off and on. He is our senior appropriations chair, and Rep. Linda Johnson and Rep. Jeffrey Elmore worked with me to get the language where it needed to be.

"This has been an issue that has popped up from time to time. So what we are able to do is be able to find the funding to actually fix the issue temporarily in this budget."

In the interim, legislative appropriations chairmen will work to find a permanent solution for the formula, he said.

Bell said he has been working with Wayne County Public Schools Superintendent Dr. Michael Dunsmore, Commissioner Joe Gurley and County Manager George Wood on the issue.

"It has been a good team effort," he said.