Revenue shortfall cause for concern
Published 4:12 pm Monday, February 23, 2009
WINDSOR – Sales tax numbers generated a discussion of tough financial times during the Bertie County Commissioners’ meeting Monday night.
Bertie County Manager Zee Lamb told board members he was concerned about the sales tax distribution for Bertie County in November and December of last year.
“We budgeted the actual receipts from two years ago,” Lamb said. “If you multiply the last two months we have received out over the next seven months, we could be facing a $400,000 to $500,000 shortfall.”
The county received $177,169 for December, 2008 and $183,931 in November. That compared to $229,923 in December of 2007 and $272,642 in November of that year.
Lamb said the 2008-09 budget included $1 million in fund balance and any shortfalls could add to that number.
He said there was also concern about shortfalls in tipping fees from the regional landfill and excise tax being collected during the year.
The County Manager also said the county had implemented cost-saving measures that he believed would help offset some of the loss of revenue.
The county budgeted $800,000 in fund balance the previous year, but between saving $600,000 on the expenditure side and increasing revenue $180,000 there was almost no change in the overall fund balance.
“There’s no way we can do that if we’re facing a $1.7 million shortfall,” Lamb said. “We will do everything feasible, but there are limits to how much we can save.”
The manager said the good news was he believed tax collection revenue would exceed the budget in the neighborhood of $100,000-$150,000 to help offset some of the lost revenue.
Lamb said the cold hard fact is that the fund balance would take a hit during the current fiscal year.
“There’s no way to add to fund balance this year,” he told the board. “If I had to give you an estimate right now I would say the fund balance would take a hit between $800,000 and $1.2 million.”
Lamb said the good news was the Bertie County Commissioners had been diligent in building the fund balance and that it could absorb that kind of loss.
“We’re lucky we have built it as well as we have,” Lamb said. “The board has done a good job of making sure we are prepared for this time of economic hard times.”
Lamb said the fund balance would still be 22-23 percent of the budget which would still be sound.
“That’s true, but suppose it lasts two or three years,” Commissioner J. Wallace Perry said, referencing the current financial crisis.
“We can’t take a $1 million hit for two or three years,” Lamb said. “We will have to make adjustments in the budget and that means cutting expenditures and or raising taxes.”
The manager said it would mean the board would have to take a long look at the upcoming budget and that it could include layoffs.
“There will be tough decisions to be made in April, May and June,” he said. “The recession is projected to be long term.”
Commissioner Rick Harrell asked if the stimulus package would aid the county and Lamb said it could help with projects, but wouldn’t provide any budgetary help.
The board then discussed further the implications of a long-term recession.
“It is only because the county is financially sound that we can take a one-year hit,” Lamb said.
Harrell added, “We’ve got to approach this as a long-term recession. If we don’t, we’re not being responsible.”