County raises taxes 10.14 cents

Jul. 01, 2014 @ 04:57 PM

The Union County Board of Commissioners approved a 10.14 cent property tax increase with passage of the 2014-2015 fiscal year budget Monday.

A state law targeting funding disputes between the county and Union County Public Schools mandated a funding level that the county must fund through increased taxes.

Besides the $106 million in UCPS funding, the budget also provides $78.5 million for raises for deputies, plans for a new human services building and a shooting range for the sheriff’s office, funding for the Warbirds over Monroe event, capital needs and a welding lab for South Piedmont Community College, a Register of Deeds redaction project, county employee pay raise, 911 center funding and other county services.

The final budget presentation was given by Union County Finance Director Jeff Yates. He again explained a recent law, introduced to the N.C. General Assembly by Sen. Tommy Tucker, which placed a moratorium on school boards in Union, Nash and Gaston counties from suing their respective boards of commissioners over funding.  Tucker called it a “cooling off period” for schools and counties to prevent legal battles over funding for the next two years.

But the legislation sets how much the county appropriates to UCPS until adoption of the 2016-2017 fiscal year budget. For the 2014-2015 fiscal year, the law states the county will pay UCPS $87 million for operations and $19.5 million for capital.

The law also includes a funding increase the following year. How much depends on the amount of growth UCPS experiences. In recent years, the average has been about 2.14 percent for UCPS annual daily membership and 2 percent for annual consumer price index increases. Yates estimated that growth as a 10.54 cent increase in the UCPS tax rate by 2016.

Once that funding pattern is established, school officials could expect the county to continue that funding model, Yates said. To ensure the county can accommodate that pattern, county staff recommends increasing the tax rate incrementally over several years. From 2016 to 2020, Yates estimated the county’s total tax rate would increase from 66 cents per $100 of valuation to 81.14 cents, assuming next year’s planned property revaluation is revenue-neutral.

The new fiscal year will see a “smoothed rate” for school funding of 44.5 cents over the next two years to prepare for higher UCPS funding amounts. Those forecasts assume about 4.5 percent increase in inflation and school growth.

“It’s a little higher than it has to be in the first year because it allows us to then collect a little bit over, then bank it for next year, so that next year’s rate you can keep the same 45.50 and not have to raise the rate again,” Yates said.

Commissioners stated they felt forced to increase taxes.

Commissioner Jonathan Thomas called attention to the county’s capital contribution to UCPS since 2011, which was $5.3 million.  In 2012, the county contributed nothing for capital, but Thomas said the county allowed UCPS to take local money budgeted for school operations expenses and use it for important capital needs.

Then he noted that the county’s estimated contribution from 2014 to 2020 is $57.1 million. UCPS requested more than than for capital funding in those years, but were denied by county commissioners. Until the money ran out in 2013, UCPS also used bond savings money left over from constructing new schools to pay for capital needs instead of getting capital funds from the county. The schools’ use of bond funds was a major point in last year’s lawsuit between schools and the county.

“Now I know they’ve said we kicked the can down the road and turned a blind eye to some things. I have a difference of opinion on some of that,” Thomas said. “But to go from $5.3 million to $57.1 million is astronomical.”

He also questioned why local funding for instruction decreased by $81,000 but support services grew by $9.6 million between 2011 and 2014.

Commissioners, Thomas said, did not want to raise taxes. But they were forced by a school board “out of control” and legislators “sympathetic to the cause.”

He defended the county’s choice to raise taxes instead of use money the county has in enterprise funds.

“But if we rob from certain accounts that we’ve got to replenish through bonds, not only do we have to pay that money down the road, we then have to pay that interest,” he said.

Commissioners approved the budget with a 3-2 vote with Thomas and Todd Johnson voting against.