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County manager recommends cuts, no tax increase

Posted on May 20, 2010 by Susan Dickson

By Susan Dickson
Staff Writer

The Orange County Board of Commissioners on Tuesday took its first look at County Manager Frank Clifton’s $174.9 million proposed budget, which includes no increase in the property-tax rate and across-the-board cuts to allocations to county departments and services, nonprofit agencies and both school districts.

The proposed budget represents a 1.5 percent decrease from the $177.6 million 2009-10 budget and an $8.9 million decrease from the 2009-10 amended budget. The budget maintains the current ad valorem tax rate of 85.8 cents per $100 of valuation. The proposal also recommends no increase on the Chapel Hill-Carrboro City Schools special district-tax rate.

“I think the county commissioners recognized beginning last fiscal year the hurdles we face going forward in Orange County, mostly as a result of exterior economic factors, but also as a culmination of many issues coming together at the same time,” Clifton said. “Obviously, in a budget process of this nature, we’ve had to reach out and touch everybody, and in doing so I’m sure some will feel that others should’ve been treated differently or they should’ve been treated differently in the process.”

Under the proposed budget, only two county departments would not have fewer employees in fiscal year 2010-11 than in 2009-10, he added. The only added county positions are to EMS, which is severely understaffed, according to recent reports.

Recommended funding for both school districts totals about $84.1 million, or 48.1 percent of the general fund budget, and represents a $1.3 million decrease from 2009-10 funding. However, the funding maintains the per-pupil allocation of $3,096, with most of the cuts to long-range and pay-as-you-go capital. Chapel Hill-Carrboro City Schools had requested a $62 per-pupil increase, while Orange County Schools requested no increase to the per-pupil rate.

Other proposed savings include:

• closing the Cedar Grove Library, for savings of $31,871;

• reducing the hours at the Carrboro Branch Library and the Cybrary, saving $17,873 and $50,771, respectively;

• providing $848,600 for 36 of 56 nonprofit agencies who applied for funding, about $200,000 less than last year; and

• providing no cost-of-living or salary increases for county employees.

Going forward

Clifton said finding a way to increase the county’s commercial tax base “needs to be a priority” for the county as it looks toward the future.

“We rely on property taxes as the revenue source for Orange County,” Clifton said. “That obviously puts a burden on those people who pay property taxes.”

According to county Finance Director Clarence Grier, one cent on the ad valorem property-tax rate equals about $1.5 million, about a 1.1 percent increase over the previous year. Property-tax revenues this year totaled about $132 million – more than 75 percent of general-fund revenues. By comparison, property-tax revenues equaled about 66 percent of revenues in 2006.

“Sales-tax revenues for this county are declining and that’s probably going to continue to happen,” Clifton said, adding that while Orange County ranks second in the state in per-capita income, it ranks 77th in sales-tax collections per capita.

“The clear indication is that people who live in Orange County shop elsewhere,” he said.

The board is scheduled to review the proposed budget at a number of work sessions over the next month, with final budget approval by June 15.

The board will hold two budget public hearings: today (Thursday) at 7 p.m. at the Department of Social Services building on Mayo Road in Hillsborough and Tuesday at 7 p.m. at the Southern Human Services Center on Homestead Road in Chapel Hill.

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