November 24, 2010

Hyde property owners are likely to see a property tax increase in 2012


Hyde County property owners should expect a tax increase in 2012, according to Interim County Manager David M. Smitherman.

Smitherman made his comments when he attended the Ocracoke Civic and Business Association meeting on Nov. 10 to discuss the county budget in detail.

When he became the interim manager in June, the budget was “out of whack” by about $1.2 million, he said.  Revenues were flat and county employee expenses are rising.
This year he eliminated some expenses, such as the vehicle replacement program, beaver management, the county newsletter, travel, and dental. 

No salary increases were given, and the county furloughed nine employees.

Smitherman said the county’s biggest budget expense is “public safety,” at $3,437,938, which includes the jail, code enforcement, animal control, the Emergency Medical Services, sheriff’s office, and fire departments.

The EMS portion of the “public safety” part of the budget is $1.5 million. Recently, the Hyde County commissioners have wrestled with controlling the personnel costs of this service by hiring more full-time paramedics, which should reduce the amount of overtime and reliance on part-time employees.

Smitherman expects to see an overall reduction of about $195,000 in that department.

The next largest expense area is “human services,” at $2,703,050. Most of this expense is not locally-generated but mandated by the state and includes child custody, the health department, and child support enforcement.

The county’s expense is for education is $1,554,263, which reflects a $100,000 cut from last year.

Total income and expenses in the budget for fiscal year 2010-2011 are $11,879,671.

“We only control about half of the income,” Smitherman explained.

Of the budgeted income, 48.42 percent, or $5,752,500, comes from the ad valorem taxes, which are property taxes.  Of that, 49.5 percent are generated from Ocracoke, Smitherman said.

“This and fees are the only income source we control,” he said.

The next highest income producer is sales tax, which is 12.03 percent of the budget, or $1,429,000.  However, overall sales tax revenues have shown a decrease of $500,000 since 2008.

A breakdown of how much of the sales tax is generated in Ocracoke was not available.

Intergovernmental income provides 24.35 percent of the income, at $2,892,494, and miscellaneous, which includes trash, provides $1,095,327, or 9.22 percent.

Other income areas of the budget include sales and services and investments and fees, which could be a source of increased revenue.

Smitherman said this fiscal year is a stop-gap year with no tax increases, but next year – fiscal year 2011-2012 will be different.

“This budget gives no consideration of growth in the school system,” he said. “When you cut the operating revenue of the school system by $100,000 and when you add facilities, that’s a problem.”

Complicating matters is the looming state budget deficit, which, by many estimates, will be $3.5 billion by next July.

“That’s a huge percentage (about 27.5 percent) in the overall state budget of about $19 billion,” he said.

But the state level is where local government issues can be changed since the state controls what North Carolina counties do, he said.

As for new revenues, the county could levy a “local option tax,” collecting one-quarter of one penny per $100 spent.  A supplemental food and beverage tax of 3 percent also could be levied.  But the county would have to put a premium on these requests, and both would have to be approved by the state.

Smitherman, who will leave his position around the end of January when a new county manager (to be determined) is hired, also noted that the county commissioners spend too much time dealing with day-to-day issues and no time on future planning.

One reason for that is the lack of continuity in leadership, both in paid management and elected officials.

“The most successful North Carolina counties are those with long-term leaders,” he said. 

With elected commissioners being replaced frequently, he added, the new ones need time to learn all they need to know about the county. Then, once they get a grasp of things, they may no longer be in office.

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