A property tax decrease of 13 cents is potentially in the cards for Macon County citizens as part of the inaugural 2023-24 budget presentation by County Manager Derek Roland.
But first, the Board of Commissioners will discuss education and emergency services during a budget work session scheduled for 3 p.m. May 30. Coverage of that budget work session will be included in next week’s edition as the meeting happened after this week’s newspaper deadline.
A public hearing is scheduled for the June 13, when a vote on the budget could possibly be held. If not, the commissioners would need to schedule a special meeting before July 1 to approve the budget.
The decrease of the property tax rate from 40 cents per $100 valuation to 27 cents is the “revenue neutral” number, Roland told the board during the May 23 presentation. Revenue neutral is typically the tax rate that would yield the same amount of property tax revenue as the current fiscal year. The total assessed tax value went from $8,520,782,794 to $12,825,780,728, a 51% increase. This is down from the original 58% increase as projected before the appeals. Roland said there were more than 2,100 appeals, which resulted in a $300 million combined decrease in appraised property value.
Roland said the precise revenue neutral tax rate came in at 26.57 cents but factored in 1.62% growth rate to reach 27 cents. With the proposed tax rate of 27 cents per $100 value, the tax bill for a house valued at $300,000 would be $810. By comparison, with the current tax rate of 40 cents, the tax bill is $1,200.
Even with the revenue neutral figure, the 2023-24 budget is projected to increase 9.3% from $59,047,113 in 2022-23 to $64,566,978, or an increase of $5,519,865.
Roland said one reason for the increase in funds is because visitor spending continues to grow, resulting in sales tax increase by 15% ($1.9 million). No fund balance will be used to fund any project, Roland said, and no additional sales tax growth was factored into the budget.
Another reason for the increase, according to Roland, is because of a $1.69 million increase in interest on investment earnings in the fund due to inflation rates. Roland said once inflation rates go down, interest returns will decrease.
The unassigned fund balance will be $42.4 million, or 68% of the total budget. The state average for similar counties is 39%, Roland said.
“Aside from financial certainty, a healthy fund balance will play a key role in our ability to move forward with major capital projects in the coming fiscal year,” Roland’s budget message states.
One of those major capital projects, Franklin High School, is noted as a 2022-23 budget accomplishment. In February, the commissioners voted to amend the architectural agreement with LS3P to include design development of the FHS main campus (Phase Two) at a cost of $714,242, and construction documents and bid procurement for the athletic complex (Phase One) at a cost of $336k.
“To date, Macon County has allocated $2,131,403 on architect fees at the Franklin High School Project,” Roland’s budget message states.
Later in the meeting, Roland said they have “pressing issues” with LS3P regarding the FHS project, saying their numbers could affect the budget.
The budget calls for a 3% cost of living adjustment (COLA) for all employees and a 1.5% one-step advancement for employees once they reach their one-year anniversary. For the average Macon County employee at $17.10 an hour, this would be 52 and 30 cent raises, respectively.
“Increases within the operating budget will enable the organization to remain competitive in recruitment and retention of high-quality employees, offset rising costs of doing business, and meet increased service demand,” Roland’s budget message states. “An increase in capital expenditures will result in replacement of the organization’s most critical network infrastructure, improvements to our most heavily utilized facilities and a continued commitment to education.”
Teacher supplement funding
For the first time in four years, Macon County Schools will receive an operational funding and teacher supplement increase from the county. The $9,696,369 is an $880,638 increase but is a litte more than half of the $1,584,197 requested increase.
Roland said the increase will result in a current expense per student of $2,187, up from $2,031. Roland said this still falls short of the $2,409 state average and is behind the $2,458 regional average, but pointed out that Cherokee, Graham and Clay counties received additional funding for being small school systems, a source of funding that Macon is too big to qualify for. Roland said if you take out that small school funding, the regional average would be $1,748.
New positions
Of the six new positions Roland calls for, three would be caseworkers in the Department of Social Services to deal with the anticipated increase of Medicaid recipients once statewide Medicaid expansion kicks in.
Another new position would be a full-time physician in the health department
The last two come from the Sheriff’s Office for a deputy and narcotics detective. Roland said Sheriff Brent Holbrooks would 100% fund those two positions through reductions in the operation budget, mainly from overtime reductions.
“Additional deputy will result in full time law enforcement coverage for the Nantahala Community,” Roland’s budget message stated.
In emergency management, Roland’s proposed budget calls for dissolving the Macon County Fire Services captain position to create an additional telecommunicator position in response to increased demand. Previously, the Macon County Fire Captain was Terry Rholetter, who was severely burned fighting a wildlife in February 2022.
Capital expenses
Capital expenditures are up $1,771,525 to $5,932,397. Out of that, the single-biggest item is $2,595,409 to replace IT equipment and software. The budget also includes $869,983 for the replacement of the “Molar Roller” child dental health mobile unit. That will be offset by $566,378 in Medicaid cost settlement.
Capital expenditures for education, separate from the $5.9 million, were at $2,138,658. Out of that, $873,658 is for the Highlands School soccer field, $1.15 million for system-wide technology and capital outlay and $115,000 for Southwestern Community College’s HVAC replacement, and replacement of an industrial roll-up door at the old National Guard Armory.
Commissioners react
Board Chair Paul Higdon said he would not comment until he digested the budget. Commissioner John Shearl wanted to hear about the education budget first and foremost at the May 30 workshop. Commissioner Josh Young thanked Roland for budgeting conservatively. The commissioners that spoke May 23 were all complimentary of Roland’s budget presentation.
Shearl said he wished to include a lot of Macon County departments in the budget review and had asked to be included in all those meetings to better understand how the county works.
“I’m still not comfortable, I’ve looked at eight budget cycles with it, and I have great concerns,” Shearl said. “I just want to understand where we can save money…. once I review this, but we’re back at a five and a half million dollar increase in this year’s budget. Every year, it’s been going [up] four or five million.”
Roland responded, saying every year the county is putting four or five million more into its fund balance reserves.
Shearl commented on the poor state of many county buildings, talking about buildings in Nantahala that he said were leaking back in 2018 and were still leaking in 2022. Shearl raised the possibility of having the commissioners go to all the county buildings and make a list of needed repairs.
“This is the people’s government, this is the people’s county, and we need to take care of the people’s assets,” Shearl said, later responding to Roland that “we got buildings that are falling apart,” to which Roland disagreed.
Roland responded to Shearl’s criticism of the county’s buildings, saying that maintenance does a great job with buildings he said are on average over 40 years old. Roland also referenced the Capital Improvement Plan the county conducted in 2019 for its buildings, which he equated to being a Bible for the maintenance staff.