County commissioners adopt budget with 2-cent property tax increase

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New Hanover County Board of Commissioners. Port City Daily file photo.
New Hanover County Board of Commissioners. Port City Daily file photo.

New Hanover County Commissioners–in a three-to-two vote–passed the county’s 2015-2016 fiscal year budget, which includes a 2-cent tax increase and a general funds budget of $292.2 million.

The 2-cent property tax increase will now place property tax at 57.4 cents per $100 of property valuation.

“If you own a home that’s worth $200,000, then the new increase will cost the tax payers about $39 extra per year,” Commissioner Rob Zapple said.

New Hanover County Commissioners Chairman Jonathan Barfield Jr. said he believed the budget was “fiscally sound,” and that the property tax increase will go toward “paying the bonded debt passed by the citizens with the community college bond in 2008 and the parks bond of 2006.”

According to County Manager Chris Coudriet, the budget he presented on Monday is same amount proposed in the June 8 meeting. He did note there was a change in the amount of capital for Cape Fear Community College, which decreased slightly–now at $1.3 million–and that the funding source will come from bond premiums instead of the county’s general fund.

The two dissenting votes came from commissioners Woody White and Skip Watkins, with White proposing a substitute motion that did not include a 2-cent property tax increase.

Citing the new accounting change to the community college capital fund, the $6 million in bond debt now equaled “about $4.8 million,” White said. He then proposed that the county should “postpone the issuance of our $92 million in debt for five months, decline the county manager’s invitation to be in the child day-care business, and limit our employee raises…which [would] leave about $1.5 million to cover the gap.”

White said the money could be taken from New Hanover County’s fund balance without effecting its current AAA bond rating. Watkins agreed with White’s proposal and seconded the motion, but when the motion was taken to a vote, it failed.

Commissioner Beth Dawson said the budget was “prudent and responsible,” and disagreed with the idea of dipping into the county’s fund balance to pay for county debt at this time.

“There has been a lot of conversations during the last couple of work sessions regarding our fund balance and [for] our debt policy as well… I do not have a high tolerance for risk or uncertainty,” Dawson said. “In my opinion, if we were to violate our fund balance policy by going under the 21 percent limit that we have set for ourselves, I am not comfortable with taking that risk on behalf of the citizens’ funds.”

Dawson said her unwillingness to move on fund balance policy at this time was due to the uncertain outcome of the state’s budget and the possibility of the passage of N.C. Senate Bill 369, which, if passed, could see considerable loss of sales tax revenue for New Hanover County.

Related story: City sounds off on proposed laws that would send local sales taxes to rural counties

Barfield also expressed his concerns with adjusting the debt policy with the N.C. Senate Bill 369 still in the balance. Barfield said if the bill were to become law, the potential loss of the sales tax revenue for New Hanover County could be between $7 and $14 million, which “would hurt our community tremendously.”

The budget takes effect July 1.