NEW HANOVER COUNTY — The New Hanover County Board of Commissioners have passed a budget after months of discussing how to square the cost of its recurring needs; this year, they landed on using savings from several funds without increasing property taxes.
As voted on Monday, the budget passed 4-1, though Commissioner Stephanie Walker dissented on the basis that raising the tax rate would have been a more responsible action.
READ MORE: County budget to be recommended with no tax increase, no Revenue Stabilization Fund
“Fund balance exists for a reason,” Walker said. “When a storm hits, when a crisis comes, when something goes wrong that nobody planned for, that fund is what stands between the county and a very hard choice. Drawing it down to hold a tax rate is not responsible stewardship of that safety net.”
Because the revenue brought in with property and sales taxes are not enough to cover county costs, the budget is balanced with $3.98 million from an unassigned fund balance, $2.2 million from assigned fund balance (which can only be used for certain expenses), and capital project savings and interest earnings totalling $5.1 million.
The county manager’s recommended budget states these “one-time tools help hold the rate flat this year, but do not address the longer-term relationship between recurring revenues and expenses” — meaning the expenses will continue but fund balance will not be replenished at the same rate.
The board was presented with a 32.6-cent option, increased from the current rate of 30.6 cents, at the end of April that would have eliminated the need for the county to dip into one-time savings and borrowing for capital. However, for Republicans LeAnn Pierce, Dane Scalise and Bill Rivenbark, that was not an option.
Chair Pierce reminded Monday’s audience the county has routinely borrowed money for expenses.
“The easy fix is to just say we’ll raise your taxes — that’s the easy fix; the hard fix is to go back to the drawing board, which is what our staff and our commissioners have done to fully fund this budget,” Pierce said.
However, Walker argued the county would face the same problem — less revenue coming in than needed — next year with less fund balance to use then.
“There will be a reckoning, and some of us will still be sitting in these seats when it comes, and I just want to put my dissent on record today,” Walker said. “I’m not opposed to this budget’s values, I’m opposed to how it’s being funded.”
In several work sessions this year, the county commissioners also chose against using the principal amount of its Revenue Stabilization Fund, established with $300 million from the 2021 sale of New Hanover Regional Medical Center to Novant Health. Their reasoning was, though the fund contains a large amount of money, it is finite and thus its recurring expenses should be covered elsewhere.
Commissioner Rob Zapple, Walker’s Democratic colleague, was against using one-time money to balance the budget in all forms, including from the Revenue Stabilization Fund despite its largesse. He argued doing so was like using a “credit card” that would have to be paid off later in that recurring expenses would need to be covered through recurring revenue when one-time money is depleted.
“I have had my objections during the debate process over the last few months with this budget,” Zapple said. “It’s never been about what we’re funding … my objections have always been about how it is being funded.”
Still, he voted in favor “because of the good it will bring” to the community, he said.
The budget includes $111.4 million for New Hanover County Schools’ operating expenses, capital outlay and pre-K, which was restored to the pre-Covid rate of $1.95 million. Including the county’s funding for school resource officers, school nurses and school-based mental health therapists, along with the Elements and Too Good for Violence programs, the total school funding is $143.4 million.
Superintendent Chris Barnes spoke during the budget’s public hearing Monday. Though the county has met the district’s request, state leaders recently announced an 8% increase for teachers, an amount not matched by the county’s appropriation.
“Some districts are going to struggle to balance the 8% salary increase for teachers,” Barnes said. “I want to make it clear without the consistent support of this body working collaboratively with our board and our staff, that could easily have been us. We aren’t facing that because we’ve been working together to meet the needs in the middle and communicate needs transparency.”
The passed budget also includes $907,000 in enhancements for the New Hanover County Sheriff’s Office to create three new positions along with several one-time equipment or software upgrades.
It put aside $300,000 to the Community Justice Center, $150,000 to the Arts Council of Wilmington and New Hanover County, $30,000 to Thalian Hall, $30,000 United Way, $30,000 to Cape Fear Habitat for Humanity, $25,000 for the Alliance of Cape Fear Trees, $25,000 to Wilmington Symphony Orchestra, and $20,000 for Cameron Art Museum.
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