County mulls 6-cent hike for property tax

May 28--LAURINBURG -- With no palatable method available to stretch its 2014-2015 budget to meet the $11 million in current expense funding requested by the Scotland County Schools, on Tuesday the Scotland County Board of Commissioners discussed a probable six-cent increase in the county property tax for the upcoming fiscal year.

That increase is projected to bring in an additional $1,094,902 in revenue to meet the 8.8 percent hike in local funding required by the school funding formula for Scotland County's schools that has since 1963 been a part of state law. As a result of the formula, the schools have requested $11,032,227 -- $892,000 more than the current year's funding -- in local current expense funds.

In addition, the school system's capital request, at $400,000, exceeds this year's by $202,000.

The tax increase would bring the county's rate to $1.09 for every $100 of property.

Those requests have come despite an appeal to the school board by the county commissioners to accept $10.1 million in local funding, consistent with the prior few years. Local money constitutes about 17 percent of the school system's $59.1 million budget.

"It's just too much to ask in this economic condition and I think the school system needs to realize that," said Commissioner Bob Davis. "They need to come to the table with something other than 'this is what the statute says and this is what we want.' Six cents is not on my radar."

The additional funding will bring Scotland County to $1,831 in local per-pupil expenditure, up from $1,656.

Davis posed the option of simply refusing to fund to the mandated level. According to board attorney Ed Johnston, the school board and possibly individual taxpayers could in response elect to sue the county, which would then have to pay the full amount if ordered to do so by a judge.

Chairman Guy McCook expressed the hope that the two boards may still reach a compromise, as without a tax increase there will be little room in the county's budget to realistically source $892,000.

"We could get rid of Parks and Rec and the library and two or three other things," Commissioner Whit Gibson remarked.

"At this point in time, to cover just the $900,000 in current expense, I don't know a practical way of getting there that should be any more acceptable or even as close to acceptable as a six-cent tax increase," said County Manager Kevin Patterson.

The Board of Commissioners are expected to resume discussion of the school funding formula in a meeting with Kara Millonzi, an associate professor of public law and government at the University of North Carolina School of Government. That meeting, to discuss the relationship between boards of commissioners and school boards, as well as the county's options vis-...-vis the school funding formula, will be held at 1 p.m. on Tuesday at the Small Business Innovation Center on U.S. 401. The meeting is open to the public.

Other increases facing the county in the 2014-2015 year include a $221,067 increase in the cost of employee health insurance, $219,256 to provide county employees with a 1.7 percent cost of living increase, $68,374 to return employee longevity pay to 100 percent, and $47,483 to manage a crew of inmates cleaning roadside trash four days per week.

Those increases bring the county's total budget to $39,672,036. With $38,577,134 in projected revenue with a $1.03 tax rate, according to Patterson the budget could be balanced without raising taxes should the school system accept a flat funding level for the 2014-2015 year.

The $783,631 in additional county appropriations to the health department prescribed by the state as part of a return to the 2011 level of funding, has not been included in the budget as those monies will not necessarily be spent, Patterson said.

Instead of increasing the department's budget to nearly $1.7 million in keeping with the state law, Patterson recommended the county dedicate $1,103,933 to actually be spent by the department, in part on a new electronic medical record system. The department will also extend contract physicians for six months and hire an additional nurse for six months to facilitate revival of its maternity clinic, which was discontinued three years ago.

"In the final budget, to meet the guidelines, we will have to appropriate more than this," Patterson said. "To come in full compliance with it ... the final budget will be higher, but we'll finagle it to basically appropriate additional monies but not release any of them to be spent."

The county is expected to use fund balance to appropriate the full $1.7 million. If it does not, the state could itself withhold funding to the health department.

"I don't like what you're planning, but I like the alternatives less," Gibson said.

In other business, the commissioners considered an appeal by the Scotland County Fire Commission to increase the county fire tax from two cents to five. At two cents, the tax brings in $235,000 to fund the county's seven fire departments. To that, $59,000 is added from collected sales tax.

The annual operational expenses of all county fire departments total some $213,000. Along with the request, the commission submitted a 20-year plan to replace all 14 of the county's aging pumper and tanker trucks at a cost of $3.8 million. The plan also includes establishment of two fire substations in the southern and western parts of the county, which would bring the insurance services rating of nearly every home in the county to a 6. Those homeowners with property outside of municipal limits would see a reduction in their homeowner's insurance costs as a result.

Commissioner John Cooley pointed out that, although the fire tax rate itself has not risen in 16 years, the raw dollar amount it collects for the fire departments has, and that some landowners may be better off paying high insurance rates than paying higher taxes on acres of woods or farmland.

"The fire tax applies to every parcel; it's not just to households," said Cooley. "I know you can't make a judgment that makes sense for everything, but for me to pay fire tax on a 10- or 20-acre pond that you couldn't burn if your life depended on it doesn't make sense. If it was tied to buildings, that would make sense."

The three-cent increase as requested by the fire commission would allow all county fire trucks to be replaced in 11 years. A two-cent increase would prolong that schedule slightly, allowing replacement of all trucks within 14 years.

Though several of the commissioners present -- John Alford and Clarence McPhatter absent -- voiced support for some increase to the fire tax, no action was taken.

"At this point, I would like to know what our total tax package is before I voted on a three cent fire tax," said Gibson. "I'm in favor of it -- I'd vote today for a two cent fire tax, but I think I might vote for a three cent fire tax if we have all the numbers in front of us."

At the close of the fiscal year on June 30, the county expects to have $5,649,777 in unassigned fund balance, or 15.7 percent of the year's budget, having added $560,000 to the fund balance from last year.

Patterson recommended that the commissioners explore ways to establish and maintain a 20-percent fund balance for cash flow as well as economic development.

"More and more of the companies that we're talking to about considering us as a locale for a facility are looking at us donating land to the project," McCook said. "If we have to do that, that could be a significant investment on behalf of the county and we want to be prepared to make that investment if we need to to bring jobs into the community."

The board will continue budget discussions at 8 a.m. Friday.

Mary Katherine Murphy can be reached at 910-276-2311, ext. 17. Follow her on Twitter @emkaylbg.

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