Near the very end of the grueling two-day, 12-hour marathon of reviewing county “budgetary challenges,” staged exclusively for the education of our elected County Commission, county manager Rocky Nelson announced that he would be retiring at the end of his current contract. He promised that he would complete the budget for FY 2012 but said it will be the most painful of the 11 county budgets he’s prepared since taking the job.
He wasn’t kidding (and he deserves some sort of local Purple Heart commendation for shouldering one of the most difficult, and thankless, jobs in local government).
Mr. Nelson starkly summed up the choices for current County Commissioners, based on projections that county sales tax revenues “are projected to remain flat.” Watauga County will be short on revenue anywhere from $2.5 million to $4 million (with the higher figure more likely), depending on how many unfunded mandates the NC General Assembly pushes down onto county governments. The four choices Mr. Nelson offered the commissioners:
1. Raise property taxes. Watauga County is currently ranked 6th lowest in tax rate of the 100 NC counties.
2. Call for a public referendum for a quarter-cent sales tax hike.
3. Raid the county’s fund balance (“rainy day,” emergency, and daily cash-flow operations fund), which could put the county in long-range jeopardy and out of compliance with mandates from the state.
4. Cut muscle (and bone) in county services (including appropriations to public schools, since education accounts for over 40% of the budget) ... which will mean firings of many employees (including, naturally, teachers and other school personnel).
The Republican majority made it very clear that option # 1 is off the table. Surprisingly, option # 2 is definitely on the table with the Republican majority, as is option # 3. The county’s fund balance is healthy, due to astute budgeting for the past three years, but it’s a sitting duck, there for the taking (and several commissioners are clearly prepared to take it, despite warnings not to).
Commissioner Gable said he was in favor of a land transfer tax in the county, evidently unaware that since that mechanism (voter referenda) was put in place in NC, every county that attempted to institute a land transfer tax was beaten at the polls, following strong negative campaigns mounted by the real estate industry. Plus the Republican majority in the General Assembly has already announced that they intend to repeal the law that allows counties to even try for the tax.
Quarter-Cent Sales Tax Hike
The biggest problem with a quarter-cent hike to local sales taxes would likely be the timing of a public referendum, since the county’s 2012 budget must be completed by July 1, and there’s a set time mandated by state law between the calling for a tax referendum and the actual scheduling of a vote (60 days? 90 days?).
Not to mention the political hand-stand the Republican commissioners will be performing locally: after campaigning against the quarter-cent sales tax hike last year, they’ll be in a vulnerable position calling for the same thing this year – despite any reasonable explanation about how the money will be used.
Vice Chair David Blust, citing himself as a model of personal budget-cutting, said he was in favor of raiding the fund balance and cutting muscle & bone, which will mean, practically, the firing of many people, including many teachers, teacher assistants, and other school workers.
Former chair Jim Deal said his top priority was still education and that jobs and economic development ranked number 2. Many interesting and even exciting economic development initiatives were presented during the two-day retreat, including the positive revenue stream now beginning to flow into county coffers from “green energy” at the county’s landfill (“energy park"), the development of Watauga County into a premier outdoor-activity destination in the East, the need for water/sewer infrastructure on the Doc & Merle Watson Scenic Byway, etc. All of these initiatives seem prime now for debilitating neglect.
Commission Chair Nathan Miller seemed ready to scapegoat the new Watauga High School as the cause for all the county’s budget problems. He wants cuts to services and inevitably to jobs. Miller and the other Republicans have an eye on the “outside” funding to agencies and non-profits that supply everything from daycare for working families to unwanted and abandoned pet rescue (and many, many other public services).
Commissioner Tim Futrelle wondered out loud how putting people out of work was going to help the local economy. Commissioner Deal said that cutting funding to outside agencies was just another way of cutting services, and the Commission needed to be honest about that. “We’ve been doing budget cuts for the last three years, and we don’t need to be asking Rocky Nelson to make further cuts without being honest that we’re talking about firing people.”
Mr. Nelson pointed out that it’s been three years since county employees have had a raise. Do you want me to cut employees fringe benefits further? he asked.
Mr. Gable said he was against cutting employee benefits, and Mr. Deal added, “If we’re going to cut anybody’s pay, we have to cut ours first.”