The proposed lower tax rate takes into account new property revaluations and a tax base that has grown by $150 million over the last two years.
BURGAW — As the county wraps up a 19-month property revaluation process, County Manager Randell Woodruff is proposing a $68.9-million budget and an 8-cent drop in the county’s property tax rate for the upcoming fiscal year.
Since 2015, the countywide tax rate has remained at 68.5 cents per $100 valuation. According to Pender County Finance Director Meg Blue, the new proposed rate for the 2019-2020 fiscal year is 60.5 cents.
Adoption of the budget by the Board of County Commissioners is planned for Monday, June 3.
Blue said the proposed rate decrease is in response to a nearly 12-percent countywide rise in property valuations — the county tax assessor’s office performs reassessments every eight years — and significant population growth in the county. According to the latest estimates from the U.S. Census Bureau, Pender County has grown from 52,416 people in 2010 to 62,162 people in 2018, an 18.6 percent increase.
Increased tax base allows for lower tax rate
Blue also urged residents to consider that the proposed rate drop-off will unlikely result in smaller tax bills for most of the county’s residents.
“You’re going to have people whose values went up and the tax rate went down, but their bill is going to still effectively go up because of the amount their value went up,” Blue said. “In general, when you’re growing, you’re driving your values up because people want to move here.”
In 2011, the last year the county performed property revaluations, the tax rate dropped from 65 cents to 51.2 cents.
A budget report from Woodruff to county commissioners earlier in the month said the new property revaluations led to a revenue-neutral tax rate of 58.4 cents — the rate that would produce similar revenues as the 68.5-cent rate produced with the 2011 values. But due to the county’s rapid growth, he said adopting such a low rate would necessitate a tax hike in the next two to three years.
Need for new projects
He also said the county will be looking into building a new jail and new middle or high school, and a healthy financial position would lead to more lenient bond ratings and interest rates for such projects.
Woodruff’s report stated that the county has grown its tax base by $150 million over the past two fiscal years, with every cent of property tax now generating $795,335. But he addressed the challenges of a growing county as it transitions to more urban development in the eastern coastal corridor.
“With the projected growth here in the region over the next twenty-five years, it is clear the county needs to have more retail, commercial and industrial growth to balance out the very significant residential growth bringing in hundreds of new school-aged children,” Woodruff said in the report.
He pointed to the need for improvements in water, wastewater, and school infrastructure for a population he said is predicted to double in the next twenty-five years. Residential growth, he said, will likely require additional bond debt and tax increases to fund school construction.
According to the proposed budget, 2019 property tax income is projected at $47.7 million — approximately $4 million more than the previous fiscal year. Total revenues in the county’s general fund for the upcoming fiscal year are estimated at $68.9 million, which also represents the total recommended budget for 2019-2020.
The current proposal does not increase solid waste fees or the EMS tax rate, which is set at 9.25 cents per $100 valuation, according to Woodruff’s report.
Half the fund balance spent on Florence recovery
The proposed budget shows total increased spending of $5.3 million (8.1 percent more than the 2018-2019 fiscal year), adjusted for expenditures related to Hurricane Florence.
“We just had a really big hurricane, and we’re slowly recovering from that,” Blue said. “Likely our fund balance will decrease some this year because we spent a lot on the hurricane and we’re waiting to get it back.”
Blue said the county’s policy is to maintain an unassigned fund balance of 20 percent of general fund expenditures. The fund balance represents the total amount of funds unassigned to the budget, essentially acting as a government’s savings account. According to Woodruff, the unassigned fund balance had grown to $30.9 million by June 2018.
But he said the county was forced to spend nearly $15 million of the fund balance on debris removal and other Hurricane Florence-related expenses, most of which he expects to be reimbursed by FEMA.
According to Blue, the new fund balance — and its percentage of total general fund expenditures — will be provided next week.
Schools, law enforcement, and unmet rural fire needs
Of the projected $4.9 million increase in county revenues over the current fiscal year budget, the county expects to allocate $2 million to increase funding for the Board of Education and another $1.4 million for increased costs in social services and public health care, according to Woodruff’s report. Pender County Schools had originally requested $4.8 million.
Approximately $2.7 million would be allocated to Pender County Schools for capital projects, an increase of 23 percent that would include repairs and improvements to school buildings.
Recently elected Sheriff Alan Cutler, who is focused on expanding law enforcement presence in the western portion of the county, would see an increased budget for five new deputies, one new sexual assault investigator, three new school resource officers, and eleven new vehicles.
Meanwhile, rural fire districts will likely not receive funding for additional paid positions because the tax base hasn’t generated enough funding to cover the costs, even though the need is apparent, according to Woodruff.
“In the rural portion of the county still served by volunteer fire agencies, it has become clear the pool of volunteers is becoming less adequate to provide services around the clock,” Woodruff’s report stated.
He said these rural fire departments are meant to be funded by the fire tax collected in each of their respective service districts. He also urged county commissioners to explore the hiring of a consultant to develop a plan on how to finance these departments in future fiscal years.
Mark Darrough can be reached at Mark@Localvoicemedia.com
