News

Board signals support for tax cut; pay raise possible

County Manager Steve Wyatt and commissioners Michael Edney, Tommy Thompson, Charlie Messer and Grady Hawkins listen to a presenter during budget workshop.

By Bill Moss, Published: January 15, 2014

Last year, Henderson County commissioners killed a proposed tax cut in a 3-2 vote. This is an election year, and it appears the idea has support to pass, especially after all three commissioners who voted no last spring indicated that they will support the 1.4-cent cut this year.

Vice Chairman Tommy Thompson, who proposed the tax cut Wednesday, also said he wanted to see the county fund a pay raise for employees and "likewise a bonus opportunity."

Commissioner Grady Hawkins in 2013 proposed the tax cut from 51.36 cents per $100 valuation to 50 cents. The tax cut failed when commissioners Tommy Thompson, Michael Edney and Charlie Messer voted down Hawkins' motion, which Larry Young voted for.

This time Thompson brought up the tax cut. Now, he said, the time is right.

"Last year a fellow commissioner proposed a tax cut," he said. "I did not feel that was the thing to do last year, I felt we needed to wait a little longer and quite frankly from what I’ve seen I think we can go down to 50 cents. I know it blows your mind, Grady, but I think we can make it happen and I think it will work well."

Hawkins said after the meeting that suggesting election-year politics changed votes was "conjecture." He will again support the tax cut, he said, because the county does have a large fund balance — it's now at $39 million, or about a third of the county budget — and because a tax cut would help both homeowners and small businesses.

Thompson, Young and Edney are up for re-election this year; Young announced last week that he was running for a fourth term. Thompson and Edney both say they will decide later this month.

After Edney ticked off numerous projects he's like to see funded in the new budget, Young responded, "You can't cut taxes and add all that to it, I'll tell you that."

Thompson's proposal came after Henderson County Manager Steve Wyatt said he would recommend no tax increase for the 2014-15 budget.

"There's not been an increase in the tax rate" in the past four years as the county has managed spending and built up its reserves, Wyatt told commissioners as they opened their annual budget workshop. "There's no increase in the tax rate (in the proposed budget) because there's no need for an increase."
Wyatt, in an overview of the county's projected revenue and spending for the budget that begins July 1, said the county does face a $5.2 million gap between projected operating costs and projected revenue. The hole can be filled, he said, by using $12 million of the county's $39.4 million fund balance.
Commissioners met in an all-day workshop to hear requests from department heads for regular operating costs and capital projects, go over revenue projections and look at issues on the horizon.
Wyatt pointed to a chart showing that the county had built up a large fund balance without raising taxes while the national government had piled up debt of $20 trillion.
"This is bigger threat than al qaeda but we can't do anything about it, I guess," Wyatt said. "This is a disgrace. If somebody wants to make a motion to label it a disgrace, you're welcome."
Among other points the manager made:

• Henderson County's tax rate of 51.36 cents is fourth lowest among North Carolina counties with at least 100,000 people.
• The county will have $923,000 less in debt service in the new budget year than it does now. "A critical issue will be how do you mange that rolloff of debt service especially knowing that you've got a list of capital projects out there on the horizon," he said.
• The Board of Commissioners could raise operating budgets of county departments by 1 to 3 percent if it was willing to spend $6.3 million to $8.6 million of the fund balance.
• The fund balance gives the board the flexibility to make decisions on capital projects or department heads' requests for new personnel and equipment, Wyatt said.

"You guys have got to weigh those," he said. "Those are public policy questions that you guys have got to think about and work through. This is a democracy and I'm pretty fond of it."