06/21/17 — Commissioners adopt interim budget

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Commissioners adopt interim budget

By Steve Herring
Published in News on June 21, 2017 7:08 AM

A roughly $10.1 million interim spending plan was adopted by Wayne County commissioners Tuesday morning in an effort to forestall a 2.46-cent property tax increase.

The stopgap measure was adopted as commissioners wait to see if state lawmakers preserve $2 million in education funding for the county's public school system.

If that happens, a regular budget could be approved containing no tax increase.

The county found out several weeks ago that it would lose $2 million in low-wealth education funding because its tax rate does not meet the state threshold required to receive the money.

Since the state operates on a biennial budget, the loss would have been $4 million over the next two years.

Wayne County Manager George Wood has called the threshold "a moving target" that the county would never be able to reach without hefty tax increases.

Rather, it would be cheaper to increase the tax rate by just enough -- the 2.46 cents per $100 of property value -- to make up the $2 million annually, he said.

However, commissioners will not know if that increase is needed until after the state budget is approved, hence the need for an interim budget.

Commissioners also are waiting to see if a provision that would exempt the county from that threshold will survive as well, which would safeguard the $2 million going forward.

As initially worded, the exemption would apply to counties where military bases are located, as long as the county schools have an average daily membership of more than 23,000 students.

Currently that would apply only to Cumberland County, home of Fort Bragg, and Onslow County, home of Camp Lejeune.

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 state budget, but have the number of students reduced to 17,000 or 17,500 in order for Wayne County to fall under the exemption.

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

Neither the $2 million for Wayne County nor the exemption provision were included in the Senate version of the budget.

As those state budget negotiations continued through Tuesday, Wood struck a positive cord that the funding would survive.

But he cautioned the board as well that it then has to go before Gov. Roy Cooper who could veto it.

"We did get word last night that our provision is in," Wood said. "We basically got word from (Rep.) John (Bell) that it's in the reconciled budget bill. We want to make sure our $2 million problem with the low-wealth schools formula is taken care of in the state's budget ordinance. So we are waiting on that.

"You can do an interim budget, and we are recommending one for 30 days. So this one carries us through July 31. There is a statute that dictates what you can put into it, but basically it's a continuation of the current year budget for one month. You also take out any capital outlay. You do not set the tax rate at this time. So we will wait on the tax rate until we do the regular budget."

Commissioners do not have a meeting set for the first of July because of the Fourth of July holiday.

If the state budget is approved over the next few days, the board can meet in special session and adopt the county's regular budget.

Doing so would make the interim budget "null and void," if it is done prior to June 30, Wood said.

The interim budget allows the county to continue to operate while forestalling setting a tax levy.

Once a tax levy is set it cannot be changed until the following year's budget is adopted.