Chairman Keith Elmore unsuccessfully pushed for leaving the Wilkes County tax rate unchanged at 67 cents during a work session on the fiscal 2019-20 budget Tuesday night.
The meeting ended with the tax rate set at 66 cents per $100 of property valuation in the new budget up for approval at the board’s regularly-scheduled meeting Tuesday night.
Also during the work session, the commissioners approved taking $226,000 more from the county’s unassigned fund balance for expenditures beyond what County Manager John Yates included in his recommended 2019-20 budget.
The $226,000 includes $100,000 for the Wilkes County Schools, $100,000 as a local match for an airport grant, $24,220 to restore a sixth Wilkes Register of Deeds position left unfilled during the recession and $2,000 for the Lincoln Heights Recreation Corp.
With the $226,000, the draft budget up for approval uses $4.95 million of county government’s unassigned fund balance. An unassigned fund balance of about $25 million is projected this June 30, which is a little over 30 percent of general fund expenditures.
The commissioners agreed to leave $160,500 already in the draft budget for four new Wilkes Emergency Medical Services paramedic positions. They discussed hiring two of the four immediately to provide 24-hour coverage for an existing satellite EMS base in the Millers Creek Fire Station and delay hiring the other two until the location of a satellite EMS base in Mountain View is chosen. Buying an existing building on Rock Creek Road has been discussed.
Commissioners agreed to leave $373,000 in the budget for a 2 percent across the board cost of living pay raise for county employees. It also has $56,000 for pay hikes exceeding 2% for 26 Wilkes Sheriff’s Office positions. It includes about $200,000 for a 4% increase in the cost of funding health insurance for all fulltime county employees.
‘Revenue neutral’ prevails
“I really believe—and I’m going to use the term ‘it’s foolish’—for us to drop this (property tax) rate,” said Elmore during the work session.
He said keeping the tax rate at 67 cents on the heels of a property revaluation completed this year would raise extra revenue to help the county fund planned big-ticket items, such as Wilkes County Airport improvements. One cent of the tax rate would raise about $580,000.
“We’re budgeting quite a bit of money out of fund balance…. We can get by budgeting out of the fund balance for three or possibly four years,” and then likely have to raise the tax rate by 6 to 8 cents to cover the budget, said Elmore.
“I would rather leave the rate where it is and not lose that half a million dollars-plus, look for cuts and hopefully experience growth over the next three years and, if we’re lucky, in four years only have to do a 2- or-3-cent tax rate increase.”
Elmore said County Manager John Yates lowered the property tax rate to 66 cents in the budget he recommended because he felt pressured by the commissioners to do so. Elmore said that earlier this year he supported this 1-cent cut to be revenue neutral, which means no net gain in revenue despite a nearly 3% increase in the county property tax base due to the revaluation.
“But the amount of money coming out of the fund balance (in the budget Yates recommended) scares me,” said Elmore, adding that he now believed it would be smart to leave the rate unchanged.
Blevins said he favored lowering the tax rate to 66 cents to be revenue neutral. “We need to be collecting the same amount in property taxes as before the revaluation. Anything else to me is a tax hike…. If in the future, we see revenues aren’t keeping up with expenditures, then we can deal with it.”
He said he disagreed with the position stated in a Wilkesboro Town Council meeting and reported in the Wilkes Journal-Patriot last week. The article quoted Town Manager Ken Noland as saying local government shouldn’t cut the tax rate after a revaluation and that some nearby local governments that did this had to pass big tax rate increases a few years later.
Settle said the 2-cent property tax cut after the fiscal 2016-17 budget was set “was foolish,” making the rate 67 cents, and would get the county in trouble, not reducing the rate to 66 cents now. Settle said he supported cutting the rate to 66 cents.
It was Blevins who made the motion to approve the 2016-17 budget with the unexpected last minute 2-cent tax rate cut. All of the current commissioners voted for that budget except Brian Minton, who is in his first term.
Elmore said he thought then that lowering the rate by 2 cents was justified. “Our fund balance was growing and I felt that it made sense to give the taxpayers some of their money back.”
When Elmore asked Wilkes Finance Director Chris Huffman for his views on lowering the rate to 66 cents, both Huffman and Yates said the current trend of expenses exceeding revenue couldn’t continue for four more years without a tax rate hike unless revenue growth increased and/or spending was cut.
Blevins said Elmore and Settle “both basically called us foolish, and that’s no way to talk about the budget,” but both made good points. “But even if we left the penny in, the trajectory is still about $3.5 million to the negative” in the fund balance. “So, you’re just putting a band-aid over a major wound. Unless we come to some kind of reckoning, we’re still going to be in that same position” with a 67-cent rate, he added.
Blevins noted that a 10 percent increase in sales tax revenue (about $1 million more) is projected in fiscal 2019-20, but “we’re still running out of money because people keep asking for more and we never say no.”
Elmore asked commissioners Minton and David Gambill for their views on setting the tax rate in the new budget.
Minton said the newspaper published a story saying the proposed new budget had a 1-cent county tax rate cut, indicating that he believed this made it hard to change now.
Gambill said “I think the natural thing would be revenue neutral and that’s what the county manager recommended and that’s where I’m at.”
With it clear that the other commissioners preferred a 66-cent tax rate, Elmore tapped his gavel and said, “Sold, so we’re at 66 cents and we’ll maintain that.”
Rudy Holbrook, Wilkes school board chairman, appeared to seek $100,000 more for the Wilkes schools, saying it was needed due to a 4.5% teacher pay raise likely in this year’s state budget. When state-funded teachers get a raise, locally funded teachers get the same percentage increase.
Holbrook also said state funding for career technical education (CTE) in the Wilkes schools is being cut by about $140,000 this year. Wayne Shepherd, Wilkes school CTE director, told the school board recently that the cut was larger and said it was mostly due to lower overall Wilkes school enrollment.
Holbrook said the $100,000 would help reduce the portion of the school system’s current expense fund balance used to balance its 2019-20 budget and leave a fund balance of about $1 million, which he said is about 8 percent of budgeted current expense expenditures. He said 8 percent is the state required minimum.
The $100,000 approved is in addition to $13.8 million for Wilkes school operations (up from $13.28 million the prior year) $650,000 for capital expenses (same as prior year) already in the proposed budget.
Holbrook said three new Wilkes school activity buses are in use now, but added that more are needed. The school system now has eight new or relatively new activity buses.
Blevins asked Holbrook if it was true that school administrative expenses had been reduced since Mark Byrd became Wilkes school superintendent about three years ago. Holbrook said these expenses have been cut about 35%, mostly by not replacing people and by combining functions when people retire. He said later that the 35% reduction occurred since about the time Dr. Steve Laws was superintendent. Laws retired at the end of 2011.
After discussion about an increase in Wilkes County government per pupil spending in recent years, Elmore said he wanted to note that Watauga, Ashe, Alleghany and Alexander counties all have one high school each. “And we’ve got four. You can imagine how that adds to our expense per student,” he said.
“We’ve done been through that one time,” said Holbrook, apparently referring to the proposed merger of East Wilkes and North Wilkes high schools, voted down in a public referendum in the 1990s.
Yates said bids totaling about $4.2 million came in about two weeks ago for re-paving and widening the airport taxiway. He said state officials gave the green light to a $4 million grant for this project, but a 10 percent local match is required. He said $300,000 already was in the budget for the match, but bids were about $1 million more than expected so another $100,000 was needed.
“If not for the airport and what we have done, Samaritan’s Purse would not be here” with the jobs it is adding in Wilkes, said Blevins. He said Vannoy Construction and Window World also regularly use the airport.
Yates said it had been suggested that $2,000 be added to the budget for the Lincoln Heights Recreation Corp., which owns the historic Lincoln Heights school and utilizes it as a community center. Efforts are underway to raise money for a new roof on the building. Yates said $2,000 is consistent with amounts given to other community centers in Wilkes, which primarily are used for softball.
Still not in the draft budget is $100,000 requested toward the cost of building a new Catherine Barber Homeless Shelter.
Carmen Decker of the Catherine Barber Memorial Homeless Shelter board appeared to repeat a request for $100,000 toward a goal of $500,000 to build a new 3,000-square-foot homeless shelter. Shelter board member Dan Huffman requested this at the mid-April commissioners’ meeting.
Decker said Huffman was at the North Wilkesboro commissioners meeting that night concerning property being bought near Beulah Presbyterian Church on N.C. 18 North as the new homeless shelter site. The current shelter, a rented house on N.C. 18 North, sometimes runs out of space.
Decker said that in addition to going far toward the $500,000 goal, the $100,000 “offers credibility that we cannot get simply on our own” to help secure other donations. He said about $126,000 had been raised.
Elmore said the $100,000 won’t be in the 2019-20 budget, but will be discussed. The commissioners appeared receptive when Decker asked them to consider giving the $100,000 over a period of years. The draft budget has $10,000 for the Barber shelter, which is $3,000 more than the prior year.
It also has $4,750 for Hospitality House in Boone, which provides temporary housing and helps secure long-term housing for homeless people in Wilkes and six other area counties. This is the amount requested. It received no county funds in the prior budget.
An article in the May 24 issue incorrectly stated that there were no funds for Hospitality House in the proposed budget.
Still not in the draft budget is $29,000 more requested for the Wilkes County Library by County Librarian Aimee James during a May 21 public hearing on the budget.
James said $29,000 was needed to fulfill the second year of the commissioners’ pledge to raise library staff pay. The draft budget already has $57,450 more than the prior year for the Wilkes and Traphill libraries combined. He intended for this to include the amount needed for the salary hike.