By Rob Morris on April 19, 2010
Faced with a $4.1 million budget gap, Dare County commissioners tip-toed around the question of a tax increase Monday, then decided to regroup next week.
County Manager Bobby Outten had asked the Board of Commissioners for guidance after reporting that declining revenues and rising expenses for the coming fiscal year meant they would have to make some tough decisions to balance the budget.
But the board was not yet ready to commit to raising taxes, cutting expenses or a combination of the two. So they scheduled another workshop for next week. The county has until June 30 to come up with a balanced budget for the fiscal year 2010-2011.
The economy was to blame for the bulk of the revenue shortage. Property tax collections are down because of foreclosures, Outten said. Sales tax revenue is flat, he said, and interest income on the county’s money is off by 50 percent.
All told, the county can expect to collect almost $2.9 million less in the coming fiscal year than the $97.6 million it expects by the time the current fiscal year ends June 30.
When all of the outlays required by law as well as increases requested by county departments and outside non-profits are added up, Outten said, total expenses come to $1,223,202 more than the current budget.
“That’s the spread we’re trying to cover,” Outten said of the two figures. The estimates assume, he said, that the county Board of Education won’t ask for more money than it received this year and the state doesn’t come up with any fiscal surprises.
Outten said the county cannot afford to put off dealing with its budget problems because 2012 is expected to be worse. The state will have no more federal stimulus money and a payment of $1.1 million for the federally mandated emergency communications system comes due.
The poor economy was reflected in some of the increases requested by non-profit groups, which are struggling with flat donations and rising needs. The Community Care Clinic, for example, wants almost triple what it received in the current budget, going from $75,000 to $200,000.
Even if he were to reject all of the requested increases, the county would still come up $3.1 million short, Outten said, because of the declining revenues and expenses that are not optional, such as debt payments and putting more money into the retirement system.
Outten presented some big-ticket expenses that are considered discretionary and cuttable, although he did not press for doing so. Two examples were the EMS helicopter, which costs $962,000 a year to operate, and one ambulance per shift, which would save $586,000.
Other possibilities, Outten said, would be to eliminate eight school nursing positions, an expense of $474,000, and six school resource officer jobs, which cost $387,000 a year.
“They aren’t a recommendation that you do all these things . . . they are things you can do,” Outten said.
Commissioner Allen Burrus zeroed in on the idea of emergency rescue cuts as ill-advised, especially on remote Hatteras Island, which he represents.
Commissioner Virginia Tillett wondered why county employees who help in the schools were highlighted as possibilities. Outten said he and County Finance Director David Clawson had also looked at 41 county positions and considered the consequences of cutting them as well. His presentation included cutting 16 positions as a possibility, for a savings of $656,000.
Chairman Warren Judge suggested that Outten return with the “darkest scenario,” a proposed budget that made up the $4.1 million by cutting expenses and not raising the property tax. But Commissioner Mike Johnson warned that could mean the loss of dozens of jobs at a time when unemployment is at near-record levels.
Commissioner Jack Shea said he wanted time to digest the numbers, but “I, for one, would not want to raise taxes.” Commissioner Richard Johnson said he wasn’t ready to reveal his position on the tax question.
The county property tax would have to be raised 2.35 cents for every $100 of valuation to cover the shortfall without making cuts. Judge said, however, that there would be an expectation that the county would also cut costs if it asked taxpayers for more money.
With the issue left hanging, the board scheduled a second session for next Tuesday at 2 p.m.