County may dodge tax increase
By Steve Herring
Published in News on May 4, 2018 5:50 AM
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Steve Herring
Wayne County Commission Chairman Bill Pate, right, last Tuesday said the board could be faced with raising the property tax rate by 3 cents this year. At left is Commissioner Joe Gurley. However, as of Thursday, Pate said the tax increase that was predicted might be avoided.
Wayne County taxpayers might dodge a possible 3-cent property tax increase predicted earlier this week by Wayne County Commission Chairman Bill Pate.
Pate has been trying to prepare taxpayers for a possible tax increase needed to offset the loss of nearly $2 million in state school low-wealth funding and to shoulder the anticipated $500,000 to cover the cost of expanding the school resource officer program.
But following a Wednesday afternoon meeting with state lawmakers in Raleigh it appears that a workaround has been found to return the nearly $2 million to the county coffers.
Also, Pate said grant money is available to cover the cost of the school resource officers.
The county had been unaware of the grant, he said.
Pate said he thinks the county will qualify for the grant and that it will apply for the next round of funding.
That, along with the additional funding from the state, will negate the need for a tax increase, he said.
The county stands to lose the nearly $2 million annually in state-allocated low-wealth funding because its tax rate does not meet the threshold to receive it.
Local legislators were able to get the $2 million for 2017-18 into the current state budget. However, they could not secure the funding for 2018-19, which means that unless something changes the county will have to absorb a $2 million annual shortfall starting fiscal year 2018-19.
The county does not have to make up the $2 million, but it does not want to leave the schools without the money, Pate said.
Pate, Commissioner Joe Gurley and County Manager Craig Honeycutt were in Raleigh Wednesday to meet with Rep. John Bell of Goldsboro and Rep. Linda Johnson of Annapolis, one of the House appropriations chairs.
Johnson also is a leader in education issues for the House.
"It was a very, very productive meeting," Pate said. "I am very optimistic that things may be worked out in such a fashion that a tax rate rise may not happen.
"I want to publicly thank Rep. John Bell and his colleagues up there for looking out for Wayne County's interest. I am a lot more encouraged than when I left town yesterday. I am very encouraged. If all the stars align, we probably will not need a tax increase, but we are not there yet."
Legislators are looking at the low-wealth formula to find a way to fix it going forward, Pate said.
"We have two issues," Bell said. "One, the bigger issue, is how do we fix it so that we are not doing this every year? So, we have a long-term fix issue which they are working on."
That fix, more than likely, will be an overhaul of the low-wealth funding and its formula, he said.
The House has been working on doing that fix for the past few months, he said.
"We are addressing that issue because it is not just affecting us, it's eventually going to affect Onslow County, Cumberland County and others along the way," Bell said.
The second and more immediate issue is how to correct what needs to be corrected so that cuts or property tax increases at the county level can be avoided, he said.
By looking at the formula for Wayne County, more than $400,000 in funding was identified, Bell said.
Johnson was able to identify another $700,000 by making adjustments to the formula calculations for a total of more than $1.1 million, Bell said.
"That will be recurring," he said. "That is not one-time money."
But that still leaves a shortfall of approximately $800,000.
"I think that we can find that," Bell said. "Now we are working to identify the other so that we can keep that $2 million in place, and not have to look at other ways to generate revenue. In her opinion and in my opinion, Wayne County deserves that funding stream.
"It is just that the formula is off and not correct so we have to adjust that formula. If we adjust it for us then you throw other entities off, and that is why we need to do a complete overhaul of the system, which is what they are doing right now."
But in the immediate future, legislators need to identify places they can get that funding in the budget and not penalize Wayne County, he said.
"I told Bill, 'Don't say those words tax increase, we are going to find ways without going there,'" Bell said.
One option is to identify projects that the county is funding to determine if the state could fund them instead, he said.
That would save the county money that could be used to help make up the $800,000 shortfall, Bell said.
Bell has asked Honeycutt for a list of ongoing county projects to see if that is possible.