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County Council, May 27

Chairman chides P&C
A proposal to mitigate the increase in property tax bills*
Warwick Jones

Yesterday’s Finance Committee meeting agenda was light. Indeed, there was nothing worthy of comment. But Chairman Pryor at the close of the meeting got our attention with some comments on a Post & Courier editorial and a proposal to mitigate the planned effective property tax increase for Fiscal 2011.

Last weekend, the P&C ran an editorial criticizing the County for not trying hard enough to avoid a property tax increase. It also criticized Council members Thurmond and Darby for leaving a Council meeting before a final vote was taken on the budget.

The Chairman said that to instigate more layoffs or furloughs for County staff, as implied in the editorial, was unfair. The budget should not be balanced only on the back of staff. He also said that the two Council members had prior engagements which he knew about. Their departure before the vote had nothing to do with avoiding a “tough call” as implied by the P&C.

The Chairman then proposed that to mitigate the increase in property taxes for FY2011, the County effectively reduce the Solid Waste Fee by $25 to $74. This would reduce projected 2011 revenues by $6.75 million and reduce the Solid Waste Fund’s unreserved, undesignated fund balance from $37.8 million to $31.1 million.

The proposed reduction, (by way of a credit on property tax bills), “will make whole” all those taxpayers who live in a property valued at $250,000 or less. The credit will precisely offset the tax increase for a property valued at $250,000 , but for properties with a lower valuation, will more than offset the property tax increase.

As the budget presently stands, the owner of a $250,000 residential property would see his property tax bill rise from $290.50 to $316, an increase of 8.7%. The increase would reflect an increase in the debt service millage of $8 and a reduction in the Local Option Sales Tax credit of $17.50.

Chairman Pryor asked Council to consider the proposal and be prepared to discuss and vote on it at the Council meeting on Tuesday next,

The proposal to “reduce” the Solid Waste Fee follows on discussion a few weeks ago about running down Fund balances to balance the 2011 budget. Staff was generally concerned about the impact of cutting balances to less than the equivalent of 2 months of spending. Levels below the equivalent of 2 months could lead to a reduction in the County’s strong credit rating, they said. However, the high level of the Solid Waste Fund balance did not escape attention and some Council members argued for a reduction. Staff at the time said that although the balance was high, spending on Solid Waste was likely to accelerate with a concomitant drawn down on the funds. It seems the draw down may not be a fast as previously thought.

* Editor: June, 2. We were unable to attend the Council meeting on Tuesday night, According to the P&C, the Council decided against a tax increase for Fiscal 2011. As well as drawing on the Solid Waste Fund balance, it will also draw on the "Rainy Day" Fund balance to avoid a tax increase.