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Board takes first look at budget

By Susan Dickson
Staff Writer

The Orange County Board of Commissioners on Tuesday took its first look at the 2011-12 county budget, which staff said could avoid major cuts and a tax increase – but only if changes at the state level do not take county revenues or pass expenses to the county.

“Based on everything we know right now, we’re not projecting a need for any layoffs right now, any major cuts in departmental spending,” county finance director Clarence Grier told the board.

However, he added, ““We don’t know what the state may do.”

The $176.9 million proposed budget represents a $1.6 million increase over the 2010-11 fiscal year budget and includes no growth in operating budgets.

County Manager Frank Clifton said the county needed to be prepared for changes at the state level that would pass expenses from the state to the county or take away revenue, given the state’s anticipated budget gap, which officials have estimated at $2.3 billion.

He also warned that there are likely to be substantial changes to state government programs that the county participates in, like the Clean Water and Tobacco trust funds.

“You have to keep in mind … that come the end of the day, [a tax increase] may be your only option to deal with some of the impacts,” Clifton told the board. “There are ways to further reduce that, but it involves doing away with programs, not just reducing the programs.”

Commissioner Steve Yuhasz said he would like to avoid a property-tax increase, even if the county lost revenues through state changes.

Commissioner Earl McKee agreed.

“I’m afraid that we may have to take a stand and possibly set expectations that there will not be a property-tax increase,” McKee said.

Commissioner Barry Jacobs said he too would like to avoid a tax increase, but that he wasn’t willing to make extremely drastic cuts to avoid one.

“There is a certain point beyond which we cease to be Orange County and we become something less, and I don’t think that that’s where we want to go,” Jacobs said.

The commissioners will review the budget in coming months, with approval slated for June 21.

The board also reviewed the requested 2011-16 Capital Investment Plan, which includes proposed county and school capital projects.

McKee questioned the inclusion of the county’s proposed purchase of a $610,000, 2.69-acre parcel next to Carrboro Elementary School for use as a library site, since the county is unlikely to have the funds to build a library for several years.

“If you haven’t been to Carrboro lately, there’s not a lot of places to build a library at a cost that anybody could afford,” Clifton said. “We thought if we acquired the land, established it as a site, that a future library might be built.”

The purchase is contingent on zoning approval by the Carrboro Board of Aldermen, which plans to hold a public hearing on the matter on March 22.

In other action, board members said they would like to revisit the quarter-cent sales-tax option, which was narrowly defeated by ballot referendum in November. Previous estimates projected that the tax could generate $2.3 million annually.

Most of the commissioners said they would like to put it on the 2011 ballot. McKee said that while he supports the tax, he would not support putting it on the ballot in 2011 because it would be the only item on the ballot in areas of the county outside of the municipalities, and turnout would likely be low in those areas.

Other commissioners said they wanted to get it on the ballot sooner because the legislature could take away the option.

In its 2007 budget, the legislature gave counties the option of a quarter-cent sales-tax increase or a 0.4 percent land-transfer tax to help compensate for money taken away from counties when the responsibility for paying for Medicaid was turned over to the state.

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