Budgets, property tax rates reflect recession

The effects of the downturn in the economy were apparent throughout the state as counties adopted their budgets for 2009-10. With commissioners determined to do everything possible to avoid raising property taxes during a recession, 72 counties were able to maintain the same tax rate while seven others managed to cut taxes for 2009-10.

Counties took a variety of approaches to balancing their budgets. Some reduced services or expenditures, while others appropriated fund balance to avoid making significant cuts. Many counties took steps to reduce personnel costs by instituting mandatory furloughs for employees, eliminating cost-of-living pay adjustments, freezing employee pay, eliminating vacant positions or laying off employees, while others cut hours in various departments or at public libraries.

Cumberland County commissioners decided to stop making contributions to their employees' 401(k) accounts indefinitely and instead set the estimated $650,000 aside as a reserve. In a memo to employees, County Manager James Martin said the decision was made to hopefully avoid "more severe budget reductions" later. If the money is not needed, the county may put the money back into employee accounts next summer.

Beaufort, Caswell, New Hanover, Randolph, Rowan and Transylvania were among the many counties that used fund balance to make up for revenue shortfalls exacerbated by the sluggish economy. Many counties projected sales tax declines of as much as 6 percent or 7 percent. Rowan County and Randolph County each appropriated about $7 million from fund balance to keep from making more severe cuts.

Durham County departments experienced a 6.6 percent cut from the 2008-09 budget to help the county avoid layoffs and furloughs. The county cut the appropriation to the school system by 2.8 percent with hope that the cut will partially be offset by a projected decrease in enrollment for 2009-10.

Four counties – Caldwell, Rockingham, Stanly and Swain – took advantage of special legislation that enabled them to rescind a scheduled property tax reappraisal.

Summary:
Increases: 9
Revaluation & increase: 11
Revaluation, revenue neutral: 5
No change: 67
Revaluation & decrease: 4
Decreases: 4
Average rate: $0.6346
Highest increase: $0.1100
Largest decrease: $0.0300