UPDATED AND EXPANDED VERSION OF THE STORY FIRST POSTED AFTER MONDAY’S BUDGET WORKSHOP MEETING
Alamance County’s commissioners have tentatively agreed to rejigger the capital outlays and savings allocation in the county manager’s proposed budget in order to keep the county’s property tax rate at its current level of 49.4 cents for every $100 of value.
The board of commissioners tentatively rallied around these changes when they convened a budget workshop on Tuesday in order to trawl through the particulars of the spending plan that county manager Heidi York had rolled out in May.
During the course of this three-hour workshop, commissioner Ed Priola proposed that the board overrule a recommendation from York to replenish the savings attached to the county’s general fund. Instead, he proposed to set aside $6.2 million from the “unassigned” portion of these reserves in order to offset a 2.25 cent property tax hike that the county manager had suggested to the commissioners.
“I think the taxpayers are being squeezed,” Priola told the rest of the board in support of his plan. “We don’t need another tax increase – not to get what we want or what the county manager has proposed – and that’s my 2.25 cents.”
As a corollary to Priola’s plan, commissioner Sam Powell suggested that the board pare back the proposed allocation of savings by $2 million and dip into the general fund’s capital outlays to make up the difference.
Both Priola’s proposal and Powell’s modification were skeptically received by the county manager, who warned these plans eat away at the county’s financial reserves to cover what are, in essence, recurring expenses. York’s admonition was later echoed by commissioner Pam Thompson.
“So, we’re going to take money out of our savings account to pay our bills again? You [addressing county manager] have highly recommended against that, and I’m not going to support it.”
– County commissioner Pam Thompson
“So, we’re going to take money out of our savings account to pay our bills again?” Thompson exclaimed. “You have highly recommended against that,” she went on to say of York, “and I’m not going to support it.”
Most of the board nevertheless reached a consensus in favor of Powell’s alternative to Priola’s proposal.
As a further addendum, the commissioners provisionally agreed to reallocate $150,000 that York had earmarked to address “compression” in county staff salaries in order to fund a proposal from Thompson to provide paramedics with extra uniforms and equip several ambulances with “whole blood” supplies, which York had previously jettisoned from her proposed budget.
The commissioners directed the county’s administrators to draw up a draft budget based on these changes that will presumably come up for a vote on the evening of June 15.
Lay of the land
The object of Tuesday’s workshop had been to give the commissioners an opportunity to trudge through the particulars of the spending plan that York had presented to them on the morning of May 18.
At the center of York’s proposed budget had been the manager’s oft-stated imperative to avoid using the savings attached to the county’s general fund as a bookkeeping tool that would cover any anticipated shortfall in revenues.
York reminded the commissioners that they had used these savings, or “fund balance,” in precisely this way for the past several financial cycles. As a result, the “unassigned” portion of these financial reserves had slipped below the board’s own self-imposed policy, which recommends that the fund’s usable savings total at least 20 percent of its annual outlays. The county manager went on to warn the commissioners that the general fund balance was on track to hit 15.1 percent of the fund’s annual outlays by the time the current fiscal year ends on June 30.
In order to replenish the fund’s savings, York advised the commissioners to increase the county’s property tax rate from 49.4 to 51.65 cents for every $100 of property value. She told the commissioners that the proceeds from this rate hike would add nearly $6.2 million to the general fund’s coffers. York paired this proposed rate increase with a 1.2 percent reduction in the general fund’s annual expenditures. Much of this reduction was predicated on the elimination of vacant staff-level posts, although the county manager also suggested a few bona fide cuts in services, such as the elimination of an hour a day from the weekday schedules of Alamance County’s libraries.
Although York’s budget called for reductions to most of the county’s departments and agencies, she did recommend an increase in the county’s allocation for the day-to-day operations of the Alamance Burlington school system. Her proposed budget earmarks $58,763,376 for this so-called “current expense” – to couch it in the school system’s jargon – or about $1.4 million more than appears in the current year’s budget.
In spite of this increase in the school system’s “current expense,” public education boosters were out in full force when the manager’s proposed budget came up for a proposed hearing on June 2. During this hearing, a large number of speakers leaned on the commissioners to increase this sum to the $62.8 million that the local school board had sought from the county. The commissioners also heard a fair number of complaints about the manager’s proposed tax increase as well as a smattering of comments from speakers who supported her budget.
A man, a plan
For the first hour or so of Tuesday’s workshop, the commissioners were repeatedly sidetracked by issues that didn’t directly pertain to the county’s next budget. The conversation was put back on course thanks to a couple of proposals that commissioner Ed Priola broached halfway through the proceedings.
A Republican who joined the county’s governing board in 2024, Priola had stepped on a few toes a year ago when he whipped out an alternative to the county manager’s budget that proposed cuts to libraries and other services in order to avert a property tax increase. On Tuesday, Priola proffered a much more modest recommendation that he conceded he had run by the county manager before he trotted it out before his fellow commissioners.
At its core, Priola’s plan proposed to eliminate York’s property tax increase by drawing $6,184,162 from the general fund’s savings. The commissioner argued that this move would still leave the reserves with the equivalent of 12 percent of their annual revenues.
“This option [pulling from fund balance] would avoid a tax increase while keeping the reserves over the threshold that would trigger state supervision. It’s everything that the manager asked for in her recommended budget. But we don’t have to saddle the taxpayers with a fourth increase in their property taxes.”
– County commissioner Ed Priola
“This option would avoid a tax increase while keeping the reserves over the threshold that would trigger state supervision,” he added. “It’s everything that the manager asked for in her recommended budget. But we don’t have to saddle the taxpayers with a fourth increase in their property taxes.”
Priola went on to propose an alternative version of this plan, which relied on spending cuts, rather than savings, to offset the revenue from the manager’s recommended property tax hike.
According to the commissioner’s arithmetic, the county could save $3 million by trimming 30 percent from the county’s capital project, $2 million through a 20 percent reduction in capital transfers to Alamance Community College and the Alamance-Burlington school system, and $150,000 by postponing a proposed study of “salary compression” among county staff. Priola also hoped to free up another $470,000 by eliminating another hour from the weekday operations of libraries and $875,000 by reducing a “cost-of-living adjustment” in York’s budget from 2.5 to 1 percent while restricting a proposed “merit-based” raise to the quarter of county staff members with the highest performance.
Counterproposal
Priola acknowledged that these proposed cuts weren’t his first choice for eliminating the manager’s property tax increase. But whether they were a serious offer or a mere decoy to ramp up support for this first option, the commissioner’s alternative proposal was consigned to the dustbin.
Priola’s preferred option also received pushback from commissioner Pam Thompson, who explicitly said she’d oppose a plan that increases the county’s reliance on fund balance. Even so, Priola’s goal of a budget with no increase in the property tax rate seemed to strike a chord with Kelly Allen, the chairman of Alamance County’s commissioners.
“People are struggling right now to make ends meet, and I have had more phone calls from people about how hard they are having it.”
– County commissioner chairman Kelly Allen
“People are struggling right now to make ends meet,” Allen assured her fellow commissioners, “and I have had more phone calls from people about how hard they are having it.”
Sam Powell, a recent appointee to the board of commissioners, also slated his support for the current property tax rate. He went on to suggest a tweak to Priola’s proposal that would pull $2 million from the general fund’s capital outlays to reduce the amount of savings that his fellow commissioner had recommended to maintain the tax rate at its current level.
Priola readily accepted Powell’s proposed adjustment, although the gesture didn’t do much to impress York.
“The motion would take nonrecurring funds from your capital and nonrecurring funds from your fund balance and put it in a recurring budget. So, we will be absolutely in the same place next year.”
– County manager Heidi York
“The motion would take nonrecurring funds from your capital and nonrecurring funds from your fund balance and put it in a recurring budget,” the county manager elaborated. “So, we will be absolutely in the same place next year.”
There will be blood
All the same, a consensus emerged among most of the commissioners to move forward with Powell’s adaptation of Priola’s proposal.
In addition, a majority of the commissioners embraced a suggestion that Thompson had raised based on a recent ride-along with some of the county’s paramedics.
Thompson informed her colleagues that her experience made it abundantly clear to her that local EMTs need an additional change of clothes due to the demands of their work. She went on to propose that EMS supply each of its employees with two extra shirts and two extra pairs of trousers. The county’s administrators put the cost of these spare duds at $27,288 – to which York suggested that the commissioners could add another $120,000 to equip four of the county’s ambulance with supplies of “whole blood” for emergency transfusions. Priola went on to recommend that the commissioners put off York’s recommended wage “compression” study to free up the $150,000 needed for these two items.
The board proved less open to a suggestion from Steve Carter, the vice chairman of Alamance County’s commissioners, for an extra $300,000 toward the operations of Alamance Community College.
Carter had proposed this outlay to cover an apparent deficit in the operations of a new public safety training center that ACC brought on line in October. The board’s vice chairman was unable, however, to come up with any additional revenues or spending cuts to offset the increased allocation.
State of unease
In addition to making these tweaks to York’s proposed budget, the commissioners also became embroiled in a number of other, tangentially-related discussions on Tuesday.
Although some of the side jaunts were ultimately abandoned, others contained the germs of future debates for the county’s governing board.
One of the more noteworthy detours was a briefing from the county’s tax administrator Brad Fowler about some potential state-level changes to the county’s taxing authority.
Fowler pointed to one piece of state legislation that would limit the amount of property tax revenue a county can collect after a mass revaluation. Dubbed House Bill 1089, this proposal, which has already passed both chambers of the General Assembly, would allow the state’s voters to weigh in on a constitutional amendment that would restrict this post-revaluation levy according to rules that the legislature would ultimately set.
“We do expect that this [constitutional amendment to limit property taxes] will pass in November, and at that point is when the real work starts. Some of the challenges we could face are service cuts, budget shortfalls, mandated cost squeezes, and debt service conflicts.”
– Alamance County tax administrator Brad Fowler
“We do expect that this will pass in November,” the county’s tax administrator admitted, “and at that point is when the real work starts. Some of the challenges we could face are service cuts, budget shortfalls, mandated cost squeezes, and debt service conflicts.”
Fowler noted that the Republican-leaning John Locke Foundation has roughed out some ways for the General Assembly to implement these new constitutional “guardrails.” He added that each of the foundation’s scenarios would shave millions of dollars from the county’s current levy of $148.7 million, should the commissioners want to retain the current property tax rate of 49.4 cents after the next revaluation in 2027.
“In other words,” he added, “if you wanted to leave the tax rate at 49.4 cents, this will say you cannot do that.”
Fifth time’s the charm?
In order to augment the county’s property tax revenue, Sam Powell resurrected the perennial gambit to add a 1/4 cent to the local sales tax rate.
Under state law, the county must obtain the consent of the local electorate in order to add this 1/4 cent to its existing levy on retail transactions. Area residents have voted down four previous bids to approve this increase – most recently in 2018, when the county’s leaders pledged to use the proceeds to pay off the debt on $189.6 million in public education bonds that the voters readily passed.
Powell insisted that a fifth referendum ought to fare better if the commissioners promise to use the funds from the higher sales tax to benefit the local school system.
“I think we should consider asking to have this put back up for a vote at the November election. If we make it known that this money is for schools, we might have an opportunity for that to pass.”
– County commissioner Sam Powell
“I think we should consider asking to have this put back up for a vote at the November election,” he said. “If we make it known that this money is for schools, we might have an opportunity for that to pass.”
Allen conceded that she thinks the county’s voters could be persuaded to support the proposed tax increase if it’s made clear that out-of-town shoppers would contribute much of the additional funds.
Even so, Alamance County’s attorney Rik Stevens observed that the commissioners would need to act fast to get the referendum on November’s ballot. Stevens pointed out that there’s a statutory deadline for ballot items that comes 45 days before voters go the polls.
“And practically, it’s far in advance of that,” he added, “because we’ll need to get the ballots prepared. So, we’re up against the deadline.”
In the end, the board as a whole seemed to lack Powell’s enthusiasm for a sales-tax referendum in this year’s general election.
