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Taxes will
rise 1 cent in county
Board trims half proposed hike in 6-1 vote to
approve annual budget
By ERIC FRAZIER
The Dispatch
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Tuesday was a night for compromise as the Davidson County commissioners
cut in half a 2-cent property tax increase that had been considered for
the 2005-06 budget.
The $105.5 million spending plan they finally approved in a 6-1 vote
features a 1-cent tax hike, scaled-back spending for eight staff positions
and a Medicaid expense estimate that one department head called "a
gamble."
Two commissioners broke campaign pledges to not raise taxes, and all but
one said they had no choice.
"I said once before I'd never vote for a tax increase - and I said at 18
I'd never walk around at the beach with a pot belly, either," said Sam
Watford, drawing laughter from the board and audience.
Davidson County's property tax rate has been 53 cents per $100 valuation
since 1999. A 2001 revaluation added about 20 percent to the average
assessment, but the tax base has been growing slowly since. Each penny now
generates $945,265.
The board dickered for about an hour over relatively small adjustments to
payroll costs and whether to raise the amount of planned transfers from
cash reserves or to lower the Medicaid allocation, which was already
$500,000 below a state estimate.
Finally, it was Watford who made the motion to adopt a penny increase and
trim the other penny from the staffing changes and Medicaid. Larry Potts
offered the second.
Asked why he voted no, Fred McClure responded, "Because we have the money
not to raise taxes. We don't have to get lucky; we just have to do what
we've done the last five years."
McClure reviewed a five-year history of the county's general fund balance.
He argued that despite budgeting transfers from reserves each year, the
county actually increased its fund balance from 14 percent of expenditures
to 21 percent. He proposed avoiding the entire 2-cent increase by
increasing the fund balance transfer. That would have raised the potential
reliance on reserves from $1.6 million to more than $3.5 million.
Fred Sink called the fund balance a "rainy day reserve fund" that could be
"wiped out in one shot" by a major hurricane or tornado.
Raising taxes will slow down the fragile county economy, McClure
countered, and he said even if the county has to tap the reserves, its
balance would remain near the statewide average of 18 percent.
"If we're not in an emergency in this county (in terms of the economy) ...
then I don't know what would constitute an emergency," McClure said.
Chairman Don Truell opposed using reserve funds to cover expenses that
repeat every year.
"I think the fund balance is for something that's more of a one-time
thing," he noted.
McClure's proposal never reached a vote.
Does Cindy Akins, who pledged never to vote for a tax increase, expect to
get criticism?
"Of course," she replied. "It's not something we wanted to do, but what
choice did we have? It was a hard struggle for me."
Akins pushed to keep a clerical position in the public buildings
department part time rather than upgrade it to full time, saving about
$17,000. She also won agreement to delay hiring a human resources analyst,
saving about $9,000.
Following the June 6 budget workshop, support appeared strong for cutting
six middle school resource officers, funded previously by a state grant.
Ending the program would save $273,482.
Max Walser suggested a compromise that would avoid putting the six
deputies out of work on short notice. He proposed that the county pay half
the cost for one more year, and the school board pay the other half.
School board members had been polled and agreed to the plan, he said.
Watford noted that high school resource officers can cover nearby middle
schools at all but Ledford High School when the program ends in one year.
Walser's motion passed unanimously.
Fred Sink recommended increasing the amount for the Davidson County
Economic Development Commission. The EDC had asked for $193,900, but the
county manager had trimmed the proposed budget amount to $182,218.
"I think that we're at a time right now that if there is one program we
need to support, it's economic development," Sink explained.
Sink's motion passed unanimously.
Altogether, the payroll reductions and EDC increase totaled about
$151,000, meaning about $794,000 will be trimmed from the amount budgeted
for the county's share of Medicaid costs next year.
The county budgeted $5.8 million for 2004-05, but last month had to
transfer $500,000 from reserves to cover higher than expected costs.
Anticipating about 11 percent health care inflation, the proposed budget
had set a $7.2 million figure for Medicaid.
Counties across the state have been pushing state legislators for relief
from skyrocketing Medicaid costs. The board asked Catherine Lambeth,
director of social services, for her opinion on next year's cost estimate.
"I think it's a gamble," she said. " ... What I'm hearing from my
counterparts in Raleigh is they will probably not do anything this year."
If the new $6.4 million budgeted figure proves too little, the
commissioners will be forced to make up the difference from the fund
balance.
The board decided it was too late to ask the Town of Wallburg to start
paying for a share of law enforcement coverage in the 2005-06 budget. But
town leaders may want to prepare themselves for next year.
Potts presented a per capita breakdown of costs for the sheriff's office,
excluding the civil division, that would charge the town about $132,000
per year. He said that would offset only part of county retail sales tax
revenues lost to the town, which are expected to be more than $210,000.
In other business, the commissioners:
n Approved unanimously an agreement with the Piedmont Authority for
Regional Transportation to build a park-and-ride lot in Thomasville. The
county and Thomasville will split 10 percent of the cost, not to exceed
$300,000, and PART will be responsible for the rest. The project is
estimated to cost less than $200,000.
n Approved unanimously a contract with St. Paul Travelers for property and
casualty insurance at an annual premium of $593,396. Renewal with the N.C.
Association of County Commissioners risk pool would have been $650,290.
n Scheduled a public hearing June 28 to receive comments on proposed
amendments to the county fire prevention ordinance.
Thomasville Mayor Joe Bennett, who some had assumed to be on the agenda to
talk about TFI layoffs, made a surprise announcement that Gov. Mike Easley
has awarded the Order of the Long Leaf Pine to Truell, the former police
chief, councilman, mayor and now commissioners chairman.
Eric Frazier can be reached at 249-3981, ext. 226, or
eric.frazier@the-dispatch.com.
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