Tuesday, June 22, 2021

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Graham, NC 27253
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At least some commissioners exploring whether to cut tax rate

As they await next month’s public hearing, Alamance County’s commissioners will have an opportunity to tinker with the manager’s budget and fine tune some of his recommendations.

One possible tweak that the commissioners may be exploring is a reduction in the property tax rate, which the manager’s budget proposes to keep at its current level of 67 cents for every $100 of property value. In years past, the board of commissioners has indeed pushed through such a reduction, although they’ve usually done so in years when some of the board members have been up for reelection, which isn’t currently the case.

Yet, the combination of resilient sales tax receipts and a hearty injection of pandemic stimulus funds has apparently inspired the commissioners to contemplate a property tax cut in the county’s next annual budget. John Paisley, Jr., the chairman of Alamance County’s commissioners, acknowledged that he and his colleagues have bandied around the idea – albeit without settling on any firm plan for how it should occur.

“I and the other board members have personally discussed, one-on-one, a reduction,” Paisley said in an interview with The Alamance News. “The problem is that with all the demands and needs from departments and other entities, its going to be difficult to come up with a [source for the] tax cut, and we’re finding it very difficult to figure out how we use some of this COVID relief [to reduce the tax rate].”

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According to the latest guidance from the U.S. Treasury Department, tax reductions are not an approved use for the funds that local governments stand to receive under the American Rescue Plan, which promises to infuse roughly $1.9 trillion in funds into the national economy.

In the meantime, the county has secured a considerable amount of cash from previous pandemic relief allocations – not to say anything about the money that has poured in from sales tax receipts over the past year. The effect of these windfalls is evident enough in the county manager’s proposed budget, which anticipates a 10.2-percent spike in the county’s general fund when compared to the sum that appeared in the budget which the commissioners adopted in June of last year.

A 10.2-percent surge in county government spending may seem a bit steep given that the consumer price index, which the U.S. Bureau of Labor Statistics uses to gauge the national rate of inflation, rose just 4.2 percent for the 12 months from April 2020 until April 2021.

Yet, in an interview with The Alamance News, Hagood pointed out that the county’s most recent adopted budget was substantially reduced from the previous year’s spending plan due to uncertainty about sales tax receipts in the pandemic.

“If you compare the recommended budget to the adopted budget,” he added, “it’s important to remember that the adopted budget reflected a projected $7 million loss in revenue from sales taxes.”

Hagood noted that, not only did sales taxes come in considerably higher than expected, but the infusion of federal pandemic relief funds has allowed the county to revised its adopted budget over the course of the year so that, at last count, it was roughly $3 million more than the manager’s recommended budget proposes for the new fiscal year.

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