The Franklin News-Post|
P. O. Box 250
310 Main Street, SW
Rocky Mount, Virginia 24151
|Mandates, flat revenue drive need for funding |
Friday, February 7, 2014
By CHARLES BOOTHE - Staff Writer
With very little extra revenue in sight, more state mandates and higher costs for services, the Franklin County Board of Supervisors is pondering a tax increase for fiscal year 2014-15.
That was the consensus of opinion at a budget workshop Tuesday afternoon, when county Administrator Rick Huff presented the upcoming budget problems and asked for direction on how to deal with them.
Those problems include:
•Federal and state mandates that total almost $2 million for the schools and $964,000 for the county.
•Increasing service demands for the county.
•Stagnant overall revenues.
•Long-term capital needs.
The projected revenue picture for next year looks flat, with only about $1.1 million more expected, Huff said. The schools will receive almost $1.1 million more from the state.
That money, he said, won't even cover the mandates, which include a Virginia Retirement System increase and several programs for schools, and increased regional jail costs for the county, as well as a spike in costs for the Comprehensive Services Act and screeners for the courthouse after renovations.
The school system can apply the extra money from the state as well as its share of the added revenue from the county ($591,000) and still be about $270,000 short of covering the mandates.
The county can use its share of the extra revenue ($530,000) and will still be about $435,000 short of paying for the mandates.
That would leave a combined shortfall for the county and schools of more than $700,000 just to pay for mandates.
Huff presented four possible scenarios to deal with the shortfall, with the first basically doing nothing.
The second scenario included a 1-cent increase in the real estate tax, which would raise about $635,000.
But, Huff said, that is still not quite enough to cover the shortfall and leaves nothing for any non-mandated needs for the county or schools or for future capital projects.
The third scenario would include a 2-cent increase in the real estate tax, as well as some possible money from an increase in the personal property tax and vehicle license fee.
This increase would bring in about $1.3 million next year to be split between the school system and the county.
The county could meet the cost of the mandates and have about $200,000 left over for other costs.
Schools could also pay for mandates and have about $367,000 more for other priorities.
As with the other scenarios, an increase in the personal property tax and vehicle license fee could be included to spread out the tax burden more evenly.
In the last scenario, a 3-cent real estate tax increase would be imposed, with proceeds divided between the county, school system and future capital debt service.
The debt service on those capital projects, which include an estimated $24 million for a new radio communications system for first-responders and $50 million for new career and technical education center, is projected to require a 6-cent spike in the real estate tax in fiscal year 2019-20, Huff said.
"We can keep whittling (at budgets)," Huff told the board, but cuts of this size will come only from services and personnel.
Any cuts would "largely involve people" and services, he said.
"What services do you want to cut?" he asked. "The biggest expenditure is in people. That's where the money is."
If cuts are to be made, county staff and the schools system need to know, Huff said.
"Do we need to look at cuts?" he asked the board.
Gills Creek Supervisor Bob Camicia said any cuts cannot involve "nickel and diming." Rather, they would have a direct impact on county operations.
Blue Ridge District Supervisor Bobby Thompson said the board should at least signal now to the school board what may be coming so they can work to finalize their budget.
"We do need to give them an idea (of where the board is going with the budget)," Huff agreed. "It would be really helpful to get it out there today."
Blackwater District Supervisor Cline Brubaker said he doesn't want to see the county "go backwards."
"We are at the bare minimum already," he said.
Brubaker recommended considering a 2-cent increase in the real estate tax, with proceeds split between the county and school system. He also said an increase in the personal property tax and possibly the vehicle license tax could provide funds for the debt service on the capital projects.
Supervisors Chairman David Cundiff agreed, saying it may not be wise to wait for a large tax increase at one time.
"We can take some of the bite out of it (the projected 6-cent increase) now and ease the pain later," he said.
Camicia also agreed, saying it should be at least 2 cents.
"Otherwise the county is moving backwards," he said. "We have to ask what is the right thing to do, and that's what we need to do. Cutting services is not something we need to be doing."
Both Boone District Supervisor Ronnie Thompson and Snow Creek Supervisor Leland Mitchell, though, indicated a tax increase is not what residents want.
"The citizens are in the same shape (financially) as the county," Mitchell said. "Is it their needs or the county's needs?"
Mitchell and Thompson, who were re-elected in November, said they have a "good idea" where the people stand, based on that election since raising taxes was an issue.
Mitchell also said there may be a "backlash" if the board raises taxes or fails to lower the vehicle license fee for next year from $34.25 to $25.
The board recently decided to lower that fee, which was initially increased to make up money lost this fiscal year because of the elimination of the county decal, and has already held a public hearing on it. But the issue was tabled after the public hearing because the board wanted clarification on what to charge for antique vehicles.
Thompson emphasized the point that many of the county's current fiscal woes are a result of cuts and mandates from the state and federal government.
"We get the blame for stuff we have no control over," he said. "Start blaming state and federal legislators who are boasting about low taxes. Put pressure on them, not us."
At the end of the meeting, Huff said he would relay to the school board that a possible 2-cent increase in the real estate tax is being considered, and the schools would receive about $635,000 if it is eventually approved.
None of the scenarios presented would raise enough money to give either county or school employees a raise that was included in a list of priorities, he said.
Huff also reminded board members of where the county stands on the real estate and personal property tax rates, compared to other jurisdictions in the region.
Franklin County continues to have one of the lowest rates on both taxes. The real estate tax runs from a low of 48 cents on each $100 of assessed value in Henry and Patrick counties to $1.19 in Roanoke City. Personal property tax rates vary from a low of $1.12 in Henry County to $2.66 in Roanoke County. Franklin County's is $1.69.
Franklin County's current real estate tax is 54 cents on each $100 of assessed value. For a house assessed at $200,000, for example, the tax bill is $1,080 a year. An increase of the tax to 56 cents would raise that bill to $1,120, or $40 more a year.
The board meets in its regular session on Feb. 18. Any decision supervisors eventually make on a possible tax increase would go to a public hearing.