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GATESVILLE – It’s not yet official, but the odds are highly favorable that the property tax rate in Gates County will be lower for the start of the new fiscal year in July.

Gates County Manager Scott Sauer formally presented his budget message at a meeting of the commissioners here Monday night (June 2). The highlight of that message is that he is proposing a new tax rate of 66 cents (per $100 of property value). The current rate, which has been in place since FY 2022-23, is 84 cents.

This change comes in a property revaluation year in Gates County, which occurs every eight years. As expected, property values rose, which typically translates into a reduction in the tax rate.

“This is a presentation, not the final product,” Sauer stressed at the outset of his budget message. “We hit the revenue neutral tax rate as discussed by the commissioners and determined by market value of real property and motor vehicles.

Sauer’s proposed General Fund budget for FY 2025-26 totals $16,615,347. That amount is $323,343 (1.91%) less than the current year’s budget ordinance.

While there are scheduled salary adjustments among Sheriff’s Office personnel – via a plan put in place two years ago – there are no across the board cost of living raises for county employees.

Included in the proposed budget are staffing adjustments: a position in the Finance Dept. is frozen; Board of Elections is adding a part-time office assistant; the Sheriff’s Office will unfreeze a vacant, full-time position; a part-time custodian will be moved to full time; DSS is adding one full-time Income Maintenance Caseworker position; and Public Utilities is adding one full-time Senior Meter Technician (using money from the Enterprise Fund budget).

Sauer noted there were many funding requests that were denied.

“If the board considered all funding requests it would require $4.5 million in new funding,” Sauer said.

He noted the bulk of the new funding requests came from the school system for their current expense money. They requested an increase of $2,845,000 (96.3 percent above current year funding).

“On its own, that request, if approved, would equate to nearly a tax increase of 22 cents,” Sauer said, adding that the school system also requested $400,000 for capital outlay, doubling the current year funding.

Combined, all of the new funding requests would drive the tax rate to $1.00.

Sauer noted that the request for increased school funding comes at a time of student enrollment dropping from 1,618 to 1,380 (a 14.7 percent decrease) over a time frame of 2020-2024. During that same period, per pupil funding has increased nearly 20 percent, rising from $1,785 to $2,140 per student.

He added that it also comes at a time where the school system’s fund balance has fell from $1,247,425 in June 2021 to $248,803 by June 2023

In June 2023, the county provided a one-time allocation of $830,000 to assist the school system.

Sauer also noted that there is an ongoing study about

school consolidation, to include the possible closure of a one of the three elementary schools, which are operating from a low of 7 percent under capacity (Buckland) to a high of 41 percent under capacity (T.S. Cooper).

Sauer pointed out there was some possible wiggle room in the budget thanks to a conservative estimation of the state sales tax that the county receives. In FY 24, the county received $924,836 more than budgeted. The prior year the increase was $960,759.

He noted that built into his budget proposal is a new retirement rate of 14.4 percent for general government employees, an increase of 5.49 percent. Health insurance premiums for county employees (paid 100 percent) is $904,432.

The lion’s share of the tax dollars in the FY 25-26 budget will fund Public Safety ($4,926.199) and Education ($3,160,000). Nearly 45 percent of the total budget is earmarked for those two departments.

The remainder of the proposed expenditures are for General Government ($3,023,799), Human Services ($2,506,397), Transfers ($1,147,921), Economic Development ($777,088), Culture and Recreation ($541,353), and Debt Service ($532,590). The latter amount is a shade over $320,000 less than the current fiscal year as Gates County continues to pay off its outstanding debt.

Taxpayer dollars are the number one source of revenue to build the FY 2025-26 budget. Property taxes top the list – accounting for over 53 percent of the total revenue – at a projected $8,926,940. State sales tax revenue returned to Gates County is projected at $3,712,105.

In his financial proposal, Sauer significantly lowered the amount of fund balance needed to balance the bottom line. He projects to use $317,463 of that fund to balance the 2025-26 budget, which is nearly 70 percent less than the $1,028,584 appropriated from fund balance during the current fiscal year. Of that amount, $167,113 is for Emergency Management projects and equipment replacement.

Other top sources of revenue are federal and state grants ($1,507,487), interest income ($456,113), and permits/fees ($225,772).

Gates County’s tax base continues to grow, estimated at over one billion dollars ($1,359,203,552) for FY 2025-26. Ten years ago (2015-16) the tax base was $979,448,438. Twenty years ago (2005-06) the tax base stood at just over 520 million dollars ($522,934,271).

The county’s property tax rate has also fluctuated over time. It was 97.5 cents (per $100 of value) in 2007-08 and 2008-09. Following the 2009 revaluation, the commissioners lowered it to 64 cents. It remained at that rate until raised to 68 cents in FY 2016-17. Following the 2017 revaluation, the property tax rate jumped to 76 cents. Another hike soon followed, up to 79 cents in FY 2019-20. Three years later (FY 2022-23), the tax rate increased to its current level of 84 cents.

Following Sauer’s budget message, three of the commissioners – Brian Rountree, Jonathan Craddock, and David Forsythe – addressed a lack of across the board pay increases for county employees. It was learned that a one percent increase would add $70,000 to the proposed new budget.

“We have a great team, we’re fully staffed and I would like to keep it that way,” Craddock said.

Craddock added that he would also like to see an investment made in upgrading school technology.

Forsythe also addressed the school’s budget, saying he supported adding $130,000 to pay for the lunch program, but wanted to keep the their current expense funding at current levels.

“We shouldn’t go one nickel higher [than that],” he stressed.

As for funding school technology, Forsythe noted there are five schools, with talks already underway about the possibility of closing one, perhaps two, of those schools. Thusly, he said it would be unwise to invest in technology at one or more of the schools that may close.

“They [school board] must make critical choices to reduce their budget,” Forsythe said.

Another work session on the budget is scheduled for 10 a.m. on Monday, June 9. A public hearing on the proposed FY 2025-26 budget is scheduled for Wednesday, June 18. That meeting begins at 6 p.m.