Crunching the numbers
WINTON – Despite an expected decrease in the local revenue generated by state sales tax, Hertford County Interim Manager David Cotton is moving forward with a balanced budget plan for FY 2020-21 that does not include a hike in property taxes.
Cotton presented his budget plan to the county commissioners at their regularly scheduled meeting here June 1. He recommended a total operating budget of $30,183,614 ($26.78 million in the General Fund) and keeping the ad valorem tax rate at its current level of 84 cents (per $100 of property value).
That proposal also included a two percent cost of living raise for county employees.
After hearing Cotton’s plan, the commissioners opted to hold a workshop on Thursday of this week to further study the numbers. They also voted to approve holding a pubic hearing on the proposed budget at their next regularly scheduled meeting (7 pm on Monday, June 15).
The commissioners can adopt a budget at any point after the public hearing, but it is required to be in place by July 1.
In his budget forecast, Cotton estimated that local ad valorem taxes will be basically level for 2020-21 ($11.87 million) compared to the current fiscal year ($11.77 million).
However, the amount of money the county receives from state sales tax is expected to be lower due to the economic collapse associated with the ongoing COVD-19 pandemic. Cotton projected an estimated $250,000 loss in sales tax, plus another $350,000 setback in Medicare Hold Harmless funds. Some of that will be recouped by an estimated $333,000 infusion of federal money from the CARES Act stemming from the COVID-19 pandemic.
He stressed to the board that nearly 70 percent of the county’s budget revenue is built on property tax and state sales and vehicle taxes.
“I’m estimating a 10 percent, across the board hit to the sales tax we receive,” Cotton said. “I’s not sure that’s enough, but with the other measures we have put in place, whatever hit we take on sales tax I think we can absorb that hit.”
To help balance the bottom line, Cotton is suggesting moving nearly $2 million from the county’s fund balance.
He mentioned that state economists are predicting it may take two to three years to rebound from the impact that the pandemic has on sales tax.
“I think each locality will bounce back differently,” Cotton noted. “I’m optimistic and say we’re going to have a flatter recovery and then a sharp upward trend.”
As normal, Cotton said public education, human services, and public safety consume the lion’s share of the county’s annual budget. For 2020-21, Cotton’s budget calls for $5.41 million for public education (down from $5.44 million for FY 2019-20); $2.25 million for public safety (a slight increase of $4,000 from the current year); and $1.62 million for human services (down from $2 million).
He added that $626,109 is earmarked as a new annual expenditure (for 10 years) to pay the debt service for the new Ahoskie Elementary School.
For public safety, Cotton is recommending the purchase of two new ambulances and one quick response vehicle, the replacement of body armor for the Sheriff’s Office, replacing the fire alarm system at the jail, and a lock control upgrade/replacement at the jail.
At the urging of the commissioners, Cotton’s proposed budget includes $100,000 to fully operate an economic development office.
Projected spending for the county’s other departments includes $517,013 for Administration, $444,197 for Human Resources and Risk Management, $353,239 for Finance, $309,736 for the Tax Assessor, $253,974 for the Tax Collector, $191,752 for Elections, $206,748 for the Register of Deeds, $189,829 for Land Records, $1.97 million for the jail, $264,929 for Emergency Management, $1.46 million for Emergency Services, $681,720 for Central Communications, and $1.16 million for Public Buildings and Maintenance.
In the Proprietary Fund portion of the total budget, there is $1.24 million projected for Solid Waste, $1.18 million for the Southern Rural Water District, $555,951 for the Northern Rural Water District, and $36,499 for the Tunis Wastewater District.
His presentation included an overview of the 2020-21 goals the board of commissioners have in mind. They include maintaining core service levels and adjust revenue projections based on the potential impacts of the worldwide economic (partial) shutdown in response to the COVID-19 pandemic; remaining competitive in the region to retain and recruit a highly skilled and qualified workforce; reestablishing a county economic development department and board; and establishing a tourism development authority.
Other goals include looking for funding sources to establish a cultural museum; and start the planning process for constructing a parks & recreation complex with public swimming pool.