Chairman directs county manager to construct a less-than-revenue-neutral-budget

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By Caroline Curran, Reporter

BOLIVIA—Brunswick County Commissioners Chairman Bill Sue has raised the bar.

For months, speculation has been rampant about the upcoming fiscal year’s tax rate. The popular assumption, even among all five county commissioners, has been county commissioners would elect to impose a revenue-neutral tax rate to offset the $9.5 billion plummet in value from this year’s countywide revaluation.

But during the waning moments of the commissioners’ two-day budget retreat last Friday afternoon, Sue directed county manager Marty Lawing to create a budget with a tax rate less than revenue-neutral.

“As you go into these budget deliberations I’d like to challenge you to come back to us with a number, are you sitting down, less than revenue-neutral,” Sue charged.

“OK, any indication on how much less?” Lawing said, drawing laughter from the packed room.

“That would put a twist on some things we’ve talked about,” Lawing responded, visibly shocked at Sue’s charge.

“I think we’ve got some potential to reduce costs. We’ve got some opportunities,” Lawing added.

Earlier during Friday’s budget session, Lawing told commissioners it wouldn’t make sense from a budget perspective for commissioners to adopt a budget based on a less-than-revenue-neutral tax rate.

“From our standpoint, and we’ve talked about it, a rate less than revenue-neutral probably doesn’t make a lot of sense from our standpoint,” Lawing said.

“If you go less than that, there’s going to be constant pressure each year. You could go less than revenue-neutral, but it’s going to impact the schools,” Lawing explained.

If commissioners were to elect a revenue-neutral rate, they would be facing a $6-$6.5 million budget shortfall without using fund balance.

But Sue said it can be done, arguing the county has enough in its fund balance and capital reserves to tap into to bring the tax rate down beyond a revenue-neutral rate, which would be around the 42-cent mark. The current tax rate is 30.5 cents per $100 of valuation.

“Let’s put it this way. The last two years we have been forecasting going into fund balance to balance our budget to the tune of approximately $6 million a year, between $6 and $7 [million] in that neighborhood, and through the good efforts of you and the department heads and everybody that works down here, we’ve come out neutral.

“That says, in essence, from what we budgeted the last two years, that you’ve come in approximately $10 million in the past two years under what you budgeted, so that’s an average of $5 million a year. If you can use the same cost saving effectiveness in the coming year that you did in the last two years…you’re talking about another $5 million. If we can reduce our cost another $5 million, under the new rate, that’s 2 cents. That would make you between staying the same and revenue-neutral,” Sue said.

Commissioner Phil Norris agreed.

“I know revenue neutral is the buzzword, but if there’s any way we can come in less than revenue-neutral, in these times, that would be thrilling,” Norris said.
“If we can’t do it, we can’t do it. But, at least, I’d like for us to try, to take a good hard look at it and see what we can do.”

Lawing said they’d likely have to allocate a fund balance appropriation to balance the budget whether it’s revenue-neutral or lower.

“We’ll look at it every way we can. Even with revenue-neutral, you’d probably have to have a fund balance appropriation to balance. We’ll do what we can,” Lawing said.