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July 22, 2014

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Originally published: 2011-03-25 15:28:43
Last modified: 2011-03-25 15:28:43

Commission will blance the budget and provide for county services

Vince Gable

Dear Editor,
The question of a tax increase dominated my campaign for county commissioner. My steadfast answer was, I will not vote for any tax increase unless as a last resort. I also stated any such increase would go to reducing our debt and should expire in three years or less. I’m still committed to this principle.
At the county commissioners’ pre-budget retreat on Feb. 25- 26, we heard from many county agencies, which were all requesting funding. The most significant funding request came from the Watauga County school board for a $1 million increase above their current budget. All the agencies, including education, presented compelling arguments.
During this same time, Gov. Bev Perdue published her proposed budget for the state. It contained provisions for numerous unfunded mandates to the counties. The state has historically provided funding for teachers’ worker’s compensation insurance, school bus purchases, road maintenance and many other programs. The governor’s proposed budget would shift these burdens to the counties. Such action would devastate Watauga County’s ability to maintain basic services. Because the state budget will not be signed until July, the county had very little time to prepare a prudent budgetary response to impending cost increases.
The question has been raised why money from the county’s emergency fund has not been applied to this year’s budget in dealing with the current revenue shortfall. The state requires every county to maintain an emergency balance of 8 percent of the budget, though strongly suggests counties maintain a 25 percent to 30 percent balance. Watauga County is fortunate to have a healthy Emergency Fund balance. With that said, approximately 20 percent of our general budget, $8.5 million, goes to service our debt – principal and interest. In four years, providing no new county debt is added, this choking debt service will drop to just over $6 million per year, as some of our debt obligations will have been paid. The county’s fund balance must provide a safety net to cover our obligations until such debt reduction is realized. It would be reckless and irresponsible to raid the emergency fund, with complete disregard for the future, to balance this year’s budget.
With the county’s staggering obligations and the governor’s cost-shifting budget in mind, we choose to take a proactive stand. Our options were substantial cuts to the budget, a property tax increase, a sales tax increase, raiding the emergency fund, or some combination of these. Planning for the worst, although hoping for the best, we pursued the most fair and prudent course of action by proposing budget cuts and exploring the sales tax option.
Time constraints caused us to act when we did. The commission passed a resolution to consider a sales tax referendum and held a public hearing on the issue. Our resolution stated any tax increase, if necessary, would be used to retire the debt, and must be reviewed by the commission in three years. We are very much aware that once enacted, monies derived from a sales tax increase could be used for any purpose the commission deemed appropriate. To protect citizens from wayward spending, we added specific language to the resolution, declaring revenue generated from the sales tax would be used exclusively to reduce county debt.
Prior to the public hearing on the referendum, I spoke with state legislators who assured me counties would not be forced to shoulder the burden of balancing the state budget – Perdue’s attempted budget manipulation would not prevail. With this understanding, I entered the public hearing convinced a tax referendum would no longer be necessary.
Many of those attending the public hearing were concerned about county funding for education. In light of changing events in Raleigh, I feel the commission will be able to both balance the budget and protect education without a sales tax increase.
My fellow conservative commissioners and I will balance this year’s budget and provide for the essential county services. We will make necessary cuts and responsibly manage the Emergency Fund. Our duty extends to all citizens and county employees; and to them we are solemn and firm in our commitment.
Vince Gable Watauga County commissioner

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