County Manager Derek Roland presented a $59,047,113 proposed budget for the 2022-23 fiscal year during the Board of County Commissioners continuation meeting on May 26.
Although the budget is an increase of $2,365,895 compared to the current year, there is no property tax increase on the table for the coming year.
“We will be able to continue moving forward without requesting a tax increase,” Roland said. “We’re also going to maintain a solid financial position.”
The county’s tax rate is currently 40 cents per $100 value. By comparison, the average tax rate in the southwestern part of the state is 46 cents and the state average is 67 cents.
Roland said the budget is a reflection of a “growing Macon County and a booming economy here locally.” Macon County continued to grow even during the pandemic, and the population has increased by approximately 1.7% since the 2020 census.
“If you look at any economic indicator that’s out there for Macon County, you’re going to see growth that we haven’t seen in over a decade.”
Roland said growth on the revenue side of the budget is due to increases in property, sales and lodging tax collections.
Sales tax collections increased 33% in a two-year period increasing from $8,383,227 in 2019 to $11,125,535 in 2021.
Residential real estate sales in the Carolina Smokies MLS area increased from $135,799,897 in 2019 to $222,327,363 in 2021. In the Highlands-Cashiers MLS, residential sales grew from $157,880,261 in 2019 to $336,809,092 in 2021.
During that same period permits for residential new construction increased from 98 permits issued in 2015-2019 to 129 in 2020 and 147 in 2021.
As a result of more revenue coming in, the county’s fund balance grew from $26,641,940 in 2020 to $32,617,937 in 2021. It is expected to stand at $36,100,000 at the end of this fiscal year.
“Make no mistake, the growth in this budget is a reflection of the current economic conditions,” Roland said.
Moving into the new fiscal year, however, Roland said they are aware there is some uncertainty on the horizon nationally as well as locally.
While the housing market has been a driving force the last couple of years, there are signs it could be slowing some. During the first three months of 2022, there was a 37% decrease in real estate closings in the Highlands area and a 23% decrease in Franklin, compared to the same period last year.
Expenditures
While increasing revenue is a positive, there are also increasing expenditures. The largest increase is in the salaries and benefits line item. The pay plan implemented in fiscal year 2022 will add $2.6 million to the 2023 budget. The budget also includes a 3% cost-of-living adjustment (COLA) for full and part-time employees and step increases for full-time employees. The COLA accounts for an increase of $726,571 and the step increase would add $198,489 to the budget. The county’s retirement contributions increased by $146,456.
Several departments are seeing increases due to rising fuel and supplies costs, utilities, postage and computer/equipment upgrades.
Some of the capital expenditures included in the budget include two ambulance remounts and medical equipment ($434,147), a transport van for the detention center ($39,661), two vehicles for the planning and permitting office ($67,090), a 40% match for a Forest Service initial attach fire engine ($20,400), a bucket truck for buildings and grounds ($50,000), three vehicles for the health department ($102,000), and construction of pickleball courts ($155,000). A building addition and awning project for Macon County Transit is budgeted at $1,076,959 with $882,007 being grant funded. The budget for the school system includes $1.15 million for technology and capital outlay and $819,381 for the Franklin High School project.
Expenditures by Function
Public Safety $17,706,902
General Government $8,225,894
Transportation $2,222,422 ($454,543 county funding)
Economic and Physical Development $641,303
Human Services $13,099,861
Recreation/Culture $3,045,039
Education $11,134,289 (Macon County Schools
$11,023,112/Southwestern Community College $289,177)
Roland said the budget as presented will achieve four objectives: maintain the current level of services, maintain the county’s solid financial position, remain competitive and maintain the tax rate.
Upcoming meetings
The Board of Commissioners recessed the meeting to continue with a budget work session on Tuesday, June 7 at 5 p.m. The public hearing on the budget will be held during the regular monthly meeting on Tuesday, June 14 at 6 p.m. The meetings are held in the board room on the third floor of the courthouse.