Uncertainties caused by the Virginia General Assembly’s inability to reach a budget agreement has caused the Clarke County Board of Supervisors to delay its final budget decision and may also result in elimination of all or part of a proposed two-cent County real estate tax hike. On Tuesday the Supervisors reached consensus to delay any formal budget action for a week in hopes of obtaining a clearer picture from Richmond before making any final decison.
On Tuesday Joint Administrative Services Director Tom Judge presented a range of issues to the Supervisors that will certainly impact the County’s final budget including a possible $116K in unexpected school funding from the General Assembly, $190K savings by delaying County real estate assessments until FY14 and how best to cover a General Assembly-mandated increase in County payments to Virginia Retirement System benefits for County and school employees.
Judge said that even though Richmond’s budget was still in flux Clarke County needed to move forward with formalizing its budget. Judge also pointed out that the County Treasurer required direction on the expected tax rate in order to fulfill her obligation to generate the required tax bills that must be mailed 30 days prior to the June payment deadline.
Judge told the Supervisors that with informal direction regarding the budget issues, as well as the Supervisors’s plans for a proposed two-percent pay hike for County employees, he could then generate a close-to-final County budget.
“With answers to these questions I can put together a budget document that is accurate and stands a good chance of adoption by the Board,” Judge said.
Yesterday’s meeting produced the Board’s strongest consensus on spending plans so far.
Over the course of the County budget deliberations a majority of Supervisors including David Weiss (Buckmarsh), Barbara Byrd (Berryville) and Bev McKay (White Post) have expressed reservations about levying a tax increase on citizens given the weak economy and all three have voiced reservations about any tax increase. Yesterday the Supervisors took a collective step toward addressing the tax increase concern through a budget compromise but at the expense of Clarke County Schools.
Tuesday’s Board of Supervisors meeting, which was also attended by Clarke County Public Schools Superintendent Dr. Michael Murphy and School Board member Dr. Beth Leffel (Buckmarsh), provided an opportunity for CCPS to make a case for retaining the unexpected new funding to make up, in part, for significant budget cuts made by the School Board.
In a statement intended to persuade the Supervisors not to absorb the increase into the County’s General Fund, Murphy offered the Supervisors several options for using the proposed school budget “bump” – which Murphy said could range between $116K to possibly as much as $170K – to benefit students and the community.
Murphy suggested that the money could be used to restore operating funds previously cut for grass mowing at the new high school or that the money could be used to replace Boyce Elementary School’s aging phone system with a new voice-over-internet-protocol (VOIP) system that leveraged broadband improvements recently implemented by the school division. Murphy also described the need to reinstate an additional new school bus that was cut from the budget earlier in the month.
Murphy said that another option, that would benefit both the community and the school system, would be to use the money for safety improvements and resurfacing two tennis courts and the running track at Johnson Williams Middle School.
But if the General Assembly Conference Committee does follow through on its planned $116K school funding “bump”, the additional money is unlikely to ever make it into the Clarke County Public School coffers after Supervisor John Staelin (Millwood) gained consensus on a plan to reduce County school funding by the same $116K amount.
For each one-cent in property tax increase Clarke County generates approximately $225K in revenue. With the combined $116K in reduced school funding and the $190K assessment cost deferral totaling $306K, the Supervisors are now poised to reduce the proposed County real estate tax rate increase from two-cents to one-cent.
“Whatever we can do to keep the tax rate where it is is in the best interest of the taxpayers,” said Supervisor Byrd.
However, a reduction in the tax rate leaves the County with one less option for combating its rising budget deficit.
One deficit reduction option, transferring funds from the County’s approximately $13M rainy day fund rather than increasing taxes, was briefly mentioned but not pursued after Supervisor Staelin expressed discomfort about drawing from the fund any further.
Supervisor McKay, who expressed hope that the tax rate hike might be eliminated altogether, agreed that the current projected County deficit, approximately $800K, was the largest that he ever recalled.
Supervisor Weiss, who has been vocal in his opposition to providing a pay increase for County workers given the soft economy, also expressed concern about the looming deficit.
“To not raise taxes at all seems disingenuous because we are running such a big deficit,” Weiss said. “Perhaps we could replace the ‘raise’ as a ‘bonus’ until we see what happens.”
The Clarke County Board of Supervisors meet on Monday, April 30th at 6:30pm with tentative plans to finalize the FY13 budget.