By Richard Sullins | richard@rantnc.com
A full four weeks before state law requires it, Lee County Commissioners are set to adopt on Monday night a spending plan for the new fiscal year that begins on July 1. For the first time, the county’s budget is projected to be more than $100 million.
It’s a budget that will reflect the solid growth numbers in population, in housing, and in business and industry that Lee County has experienced for the last four years or more. It’s also a budget that will show how those bigger numbers in the amount of tax dollars don’t always translate to relief for taxpayers, even when the tax rate is lowered.
The big picture
The budget is a 125-page spending plan that represents the best wisdom of the commissioners and their staff. This year’s budget team was led by the new county manager, Lisa Minter, who most recently served as assistant county manager under her predecessor, Dr. John Crumpton.
The details of the revenues and expenditures for next year reflect an estimate of receipts and expenditures from July 1, 2023, through June 30, 2024, of $105.3 million. That’s a very large number, but it’s consistent with the trends observed over the past couple of years. It’s $15 million larger than last year’s budget of $90 million, and $21 million bigger than the $84 million budget passed two years ago.
Cutting tax rate, but property owners to pay more?
This year’s budgeting process has gone smoothly, at least until now. To the segment of the populace that doesn’t follow local politics closely, it can seem like the budget just ended a few weeks ago and now it’s back again, magically appearing out of thin air. But in reality, preparation for the coming year’s budget started immediately after the adoption of the current year’s plan and the November 2022 elections.
But there was an additional wrinkle in preparing for the unveiling of the next budget, and it came in the form of the county’s process of revaluing all non-governmental property within the county. The whole process of doing reassessments of privately-owned personal and real property required by state law to be done at least every eight years, but Lee County does it every four years in an effort to soften the financial impact to the property owner.
This year’s revaluation process determined that the new tax base (all individually and corporately-owned property) for the county in 2023 is $8.8 billion, an increase of 32.65 percent over last year’s total property valuation of $6.6 billion – a difference of $2.2 billion.
That increase in value is what’s behind a proposed lowering of the property tax rate from 73 cents per one hundred dollars in valuation to 65.
But that cut in the property tax rate won’t be much help for most taxpayers. Increasing the value of real and personal property by an average of 32 percent simply swallows up the eight percent cut in the tax rate and will leave a great many taxpayers owing more this year than they have in previous years.
After the last revaluation in 2019, the commissioners adopted a budget with a tax rate of 77.5 cents per $100 in valuation. The revenue neutral rate that year was 77.68 cents, just higher than the adopted rate.
The county also takes in about a quarter of its income through sales taxes, and the growth in population that the county continues to experience, along with the foot traffic generated by an influx of visitors, continues to generate significant increases there. The county has historically been conservative in estimating proceeds generated by the sales tax.
Last year’s estimate of seven percent growth in the sales tax was topped by a nine percent actual growth in receipts. The 2023-24 budget proposal estimates growth this fiscal year closer to the five percent range, but there are some in the retail business sector that feel that number is once again too low.
Where the increases are
The budget proposal commissioners will consider on Monday night makes clear that the FY 2023-24 budget proposal is driven by increases in staff, pay, and benefits. The COVID-19 pandemic was especially hard on local units of government. The county continues to experience issues with employee turnover, with more than 30 vacant positions listed on its employment opportunities webpage.
The budget proposes to fully fund a seven percent cost of living adjustment for county employees that it began in the current fiscal year, as well as the implementation costs of a new pay plan for employees in 2023-24. It would also add 13 new full-time positions and reclassify an additional 13 others to help meet the demands for serving the needs of the county where they are the most critical.
As an additional incentive for employees to stay with the county, Minter proposes the creation of a tuition reimbursement program for employees that would initially be funded at $20,000.
The county received a request for just under $22 million in local funding from the Lee County Schools district, the largest independent agency that receives county support. This year’s request from the school system represents a $2.3 million increase over its current funding level. Costs for personnel make up the largest increase in this year’s LCS request, which includes a one-time $1,200 per full-time employee supplement as a bridge to a new program that would be implemented in the 2024-25 budget year.
Next to education on the county’s listing of most expensive priorities is the Sheriff’s Office and the public safety functions it provides. Like most other agencies, the escalating costs of salaries and associated benefits drove the new year’s budget request from Sheriff Brian Estes.
Minter is recommending two new detention officers to be housed in the jail and another new position to handle financial issues. The office’s combined budget is proposed to be $11,910,063, an increase of $2.2 million over the current year. Estes would also receive enough funding to furnish and equip 14 of the 19 vehicles he had requested for the coming year.
Change in fire tax prompts heated discussion
The most controversial item during the meeting on May 15 were comments made by five members of several volunteer fire departments that revolved around a proposal made by Minter for an across the board rate for residents served by departments located in rural sections of the county.
For the past 16 years, rural departments have submitted their annual budget requests for county funding to the Fire Advisory Board, who in turn made recommendations to the commissioners on the items that should be funded and the tax rates per district needed to provide that funding. A proposal for a flat rate fire tax to replace the floating version has been kicked around for several years and given that 2023 is a property reassessment year, the county manager decided that the time was right to make the change.
Seven volunteer fire departments would be impacted if the plan is adopted. Three – Northview, Tramway, and Lemon Springs – would see their rates go up while four others – Cape Fear, Carolina Trace, Deep River, and Pocket – could see theirs go down. But they spoke with one voice to the commissioners in May – none wanted to scrap the current system.
Christopher Cox, who has served with the Cape Fear Volunteer Fire Department for the past 21 years, questioned why the county would propose to move forward with the plan when it hasn’t been tested, and called it “a premature and Communist idea.”
Derek Dyson, assistant chief of the Tramway Volunteer Fire Department, also questioned the wisdom of scrapping a system that has worked well for a decade and a half and requested that “this decision be tabled for a minimum of one year to iron the kinks out.”
What the volunteer firefighters said seemed to have an impact, at least with some members of the board. Chairman Kirk Smith expressed his appreciation to those who spoke and others who didn’t, saying, “we appreciate your services, and we heard what you said.”
The commissioners discussed the fire tax proposal at a later working session but did not come to a conclusion on how to handle it.
Other requests for funding
Five previously funded nonprofit groups in the human services sector requested funding again this year. Three of the five – Lee County Industries, The Salvation Army, and Helping Hand Clinic, Inc., – would see funding next year if the proposal is adopted.
HAVEN, which aids victims of domestic violence and sexual assault, The Boys & Girls Club of Sanford and Lee County, and the Temple Theatre would each get $10,000 in the budget plan. Under a rule adopted by the commissioners last year, nonprofits approved by the commission for funding may receive allocations of no more than $10,000 per year.
The county manager’s recommended budget proposes a $100,000 increase in the current expense account for Central Carolina Community College, largely to cover inflationary increases. State law provides that county governments are to pay for the operational costs of its 58 community colleges through current expense, which include items like utility costs, maintenance expenses, and legal fees.
For the second consecutive year, Minter is asking the commissioners to approve $920,000 in additional funding to CCCC for its E. Eugene Moore Manufacturing and Biotech Solutions Center, located on a 22-acre tract of land adjacent to its Kelly Drive campus that was the home of Magnetti Marelli’s automotive powertrain technologies for 45 years.
The county acquired the property on behalf of the college in the summer of 2021 and getting the facility ready for occupancy has taken nearly two years. Lee County has already put more than $7 million into the complex and additional help is being sought from the state legislature in its budget plan for this year. Having the complex available was a key selling point in the state’s pitch to bring Vietnamese EV manufacturer VinFast to a megasite in Chatham County last year.
The Sanford Area Growth Alliance would see its 2023-24 funding request of $355,970 to the county fully funded if approved. SAGA is the combination public and private economic development partnership of Sanford and Lee County that has been incredibly successful in attracting new jobs and new investments, the fuel that is powering the growth in the county’s population and economy.