By Susan Dickson
Staff Writer
As the county gears up for budget season, officials say they hope to limit the tax-rate increase this year.
State law requires the county manager to submit a budget to the Board of County Commissioners by May 15 and the board to approve a budget by June 30. The board will work through budget issues at this year’s first regular budget work session on Thursday.
At a retreat in January, the board discussed limiting the tax-rate increase to equal the amount of debt-service payment increases.
Board Chair Moses Carey said the board would like to “minimize the increase in the tax rate†and has given County Manager Laura Blackmon some general directions for the budget. However, Carey said, “At this point, they are merely budget goals.â€
According to budget director Donna Coffey, the county has seen a tax-rate increase every year for the past 18 years, with an increase of about 13 cents in the past two years.
Coffey said most of the tax-rate increase funds schools and debt. The county’s annual debt payments equal about $23.4 million — $17.6 million for school facilities and $5.8 million for county facilities, according to Coffey.
A major budget driver this year will be an increase in the number of students in the two school systems, Coffey said. In addition, increased operating costs from the opening of Carrboro High School and for Gravelly Hill Middle School, which was open for only part of this school year, will affect the budget.
Coffey said the county is also waiting on state legislation that could bring relief to counties’ Medicaid costs.
North Carolina is the only state that requires counties to fund a percentage of non-administrative Medicaid costs. Counties pay about 5 percent of Medicaid costs, while the state funds about 33 percent and the federal government pays more than 60 percent.
Coffey said about $3.9 million of the county’s $166 million budget is dedicated to Medicaid costs.
The state legislature is considering a couple of options for Medicaid relief, including a bill under which the state would take over all Medicaid costs, funded by a one-cent sales-tax increase. In addition, some legislators have suggested pushing back the expiration date on a cap on counties’ Medicaid contributions.
Coffey said that while Orange County’s “portion of Medicaid is not as significant as poorer counties’,†it is difficult to plan a budget while waiting on such legislation.
“It’s a moving target,†she said.