Saturday, April 20, 2024

114 West Elm Street
Graham, NC 27253
Ph: 336.228.7851

Commissioners set new property tax rate: 43.2¢ per $100 on 4-1 vote

New rate is .61¢ above ‘revenue neutral’; Board chairman John Paisley wanted to keep rate at 43¢, which had seemingly been the consensus last week

[Editor’s Note: this is the expanded story published in June 22, 2023 edition.]

Alamance County’s board of commissioners has approved a budget for the next fiscal year that features a property tax rate of 43.2 cents – or roughly three fifths of penny more than the amount needed to offset the results of the county’s latest property revaluation.

The commissioners adopted this budget by a margin of 4-to-1 on Monday after they agreed to earmark some more funds for the local school system, which had found itself in a late-breaking financial crisis.

ABSS Superintendent Dr. Dain Butler

Earlier that evening, Dain Butler, the superintendent of the Alamance Burlington school system, implored the commissioners to tack $867,930 onto the proposed allocation that the county manager had previously penciled in for the school system. Butler asked for this additional revenue due to a precipitous drop in the school system’s fund balance, or primary financial reserves – which he attributed, in part, to the actions of the school system’s previous superintendent.

- Advertisement -

“I inherited a fund balance of $2.9 million, which is very unhealthy,” he elaborated during his appearance before the commissioners on Monday. “Our fund balance is deathly low, and I need help until I get it back to where it needs to be.”

Best-laid plans…
Before they heard the superintendent’s entreaties on Monday, a majority of the commissioners had converged on a proposed tax rate of 43 cents – an increase of .41 cents over the so-called “revenue neutral” levy that would effectively offset the county’s financial windfall from the recent revaluation.

The commissioners had arrived at this 43-cent figure last Tuesday after weeks of deliberations over a recommended spending plan that Alamance County’s manager Heidi York had presented to them in May. In the end, the five-member board found roughly $6.1 million in spending cuts and revenue reallocations that allowed them to whittle away 2.43 cents from York’s proposed property tax rate of 45.43 cents.

In its broad outlines, the budget that the commissioners ultimately approved remains quite similar to York’s recommendation.

Aside from Monday’s increase in the school system’s allotment, the most significant change that the commissioners had made to the manager’s proposed budget was perhaps to cut one percentage point from a 5-percent cost-of-living adjustment that York had requested for the county’s whole full-time staff.

[Story continues below special subscription offer.]



The commissioners also imposed a hiring freeze on most of the county’s vacant positions, found new revenue sources for nearly $2.2 million in capital expenditures, and siphoned off some $2.5 million in surplus cash that has accumulated in a school system capital reserve fund thanks to allocations the county has made to pay off a bond package that local voters approved in 2018.

The board’s decision to divert the school system’s capital reserves – which critics refer to as a “raid” – had drawn intense pushback from public education boosters – many of whom addressed the commissioners when the county manager’s budget came up for a public hearing earlier this month. So, as an added concession to the school system’s backers, the commissioners agreed to allocate nearly $200,000 that they had left over after distributing the proceeds of a 43-cent tax rate. The commissioners set this money aside in order to augment the county manager’s allocation for the schools so that, at the very least, they could cover the full cost of adding an extra percentage point to the school system’s salary supplement for its teachers.

 

Things fall apart
These carefully-laid plans were nevertheless thrown into disarray on Monday when the superintendent sprung the news on the commissioners about the school system’s sudden financial crisis.

In his remarks to the county’s governing board, Butler recalled that he had previously pared back the school system’s own budget by more than $7.5 million over the current and upcoming fiscal years in order to free up funds for high-priority items such as added compensation for coaches, hiring athletic trainers for each high school, as well as an increase in the local salary supplement for the school system’s teachers.

Butler nevertheless said that he has been forced to confront the prospect of additional cuts due to the unexpected depletion of the school system’s primary reserve fund. In a subsequent interview, the superintendent told The Alamance News that this financial drain stems from contractual obligations that predated his arrival as superintendent less than a year ago.

“The money is flowing out faster than it’s coming in,” he told the newspaper on Monday, “and I can’t sort that until the contract runs out on July 1.”

Butler was even more elliptical about the cause of his consternation in his remarks to the commissioners. But he was unequivocal about the impact on the school system’s primary reserves, which he admitted have plummeted to less than $1.3 million.

The superintendent conceded that the school system isn’t statutorily required to maintain a certain level of savings – as is required in the case for North Carolina’s counties and municipalities. He added, however, that the schools still need a modicum of available cash to cover their expenses. He went on to bemoan the austerity measures that he’ll have to take if the commissioners were unwilling to bail him out of this fix.

“There’s not much more to cut other than people and specialty programs like art and music,” he went on to lament, “and we don’t want to go there.”

 

Ask and ye shall receive
In deference to Butler’s entreaties, a majority of the commissioners eventually agreed to add another two-tenths of a cent to the 43-cent rate that they had previously endorsed. They also agreed to dip into their financial reserves to make up the difference needed to fully cover Butler’s request.

Yet, the superintendent’s eleventh-hour petition wasn’t received with a grin by all of the county’s elected leaders.

Particularly incensed by the timing of this request was John Paisley, Jr., the chairman of Alamance County’s commissioner, who had previously rallied his colleagues in support of a new budget founded on a 43-cent property tax rate.

“Now, at the last second, you folks come in and ask for almost $900,000?!” he protested. “Now, at our last meeting in June, you want to make us look bad for what happened in the prior administration because they misappropriated money…I think that is a low shot.”

Paisley went on to object to the public relations blitz that the school system had mounted earlier that day to cajole the commissioners to increase their proposed allocation for the schools. He also complained that the schools have failed, in the past, to make full use of the funds they’ve received from the county to plug persistent roof leaks and attend to other basic maintenance needs.

Meanwhile, both he and commissioner Bill Lashley excoriated the schools for previously using federal funds to bankroll employee bonuses rather than urgent HVAC overhauls.

Butler repeatedly insisted that that decision pre-dated his arrival as superintendent last July 1, and asked the commissioners to consider his performance, rather than that of past school system administrations.

But, the sins of the past were less of a concern to other members of the county’s governing board. Commissioner Craig Turner, for one, was willing to entertain Butler’s request even when it became clear it would force him to abandon his previous insistence on a revenue neutral property tax rate. Turner went on to propose a new tax rate of 43.2 cents in combination with some additional funds from the county’s savings to cover the cost of the school system’s bailout.

“I didn’t want to go above 43 [cents]. I wanted to go the other way,” he went on to argue in defense of this proposal. “But I thought it was the only responsible way to give the school system the money it needs.”

Turner’s proposal eventually won over fellow commissioners Pam Thompson and Steve Carter. It even found favor with Lashley, who ultimately made the motion to include this arrangement in the county’s new budget.

“You probably shouldn’t start out next year in an $800,000 hole,” he added, addressing the superintendent directly. “And with this being a re-occurring expense, we probably need to make that [43-cent tax] rate higher.”

Lashley nevertheless pledged to hold Butler’s feet to the fire to ensure that he is circumspect in his use of the county’s appropriation.

“I want to let you know, Dr. Butler, I will be one of the hardest critics of your organization going forward because you really have put me in a bad spot,” he declared after his motion passed in a 4-to-1 vote.

The lone holdout on Monday’s decision was the chairman of Alamance County’s commissioners, who tried unsuccessfully to hold the line at the 43-cent tax rate around which a consensus had formed last week.

“Guys, I just can’t vote above 43 [cents], I’m sorry.” Paisley told the rest of the board. “My vote against this budget was not a vote against the school system. It was a vote against going above 43 cents, which I had staked myself on several meetings ago.”


Read the newspaper’s editorial page views on the budget situation:

Commissioners get snookered by school board: https://alamancenews.com/commissioners-get-snookered-by-school-board/

Budget games: https://alamancenews.com/budget-games-2/

Must Read

Elon town council focuses on part-time position amid $10.9M budget

Elon town manager Richard Roedner had put out a proposed budget totaling about $10.9 million a few weeks ago. He proposed one new employee,...