County’s budget battle heads into homestretch

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Mecklenburg County’s 2011 property tax revaluation could result in the county raking in an extra $70 million in revenue for its fiscal 2012 budget. For some county commissioners, the money is already burning a hole in their pockets, and they’ve come up with their wish lists. Some are calling for more spending on schools. Some want raises for county employees.

Others, though, want to go in the opposite direction and lower the tax rate to avoid extra revenue.

Commissioners agree on this much: They will have to work hard to find common ground on spending priorities. Usually, when it comes to contentious votes, the board is often split, with its five Democrats on one side and four Republicans on the other. But when it comes to next year’s budget, even members of the same political party don’t see eye to eye.

Fueling the rise in revenue is a large increase in the county’s overall value of properties. Property values rose on average by 9.2 percent in the recent revaluation, bringing the total value of properties in the county to roughly $110 billion.

In his budget recommendations presented to commissioners May 17, county Manager Harry Jones called for the county’s property owners to pay a tax rate of 82.49 cents for every $100 in value as determined by the county in the recent revaluation. That’s a 1.38-cent decrease from fiscal 2011. Jones’ budget did not include all of the money requested by Charlotte-Mecklenburg Schools but did include $29 million for education, or about 65 percent of the CMS request.

On Wednesday, commissioners decided to increase projected sales tax revenue by $3 million during their straw voting process. But the extra projected revenue didn’t find its way to county schools or Central Piedmont Community College.

The extra sales tax revenue projection seemed enough to convince a majority of commissioners that they could lower the property tax rate by 2 cents from Jones’ recommended rate of 82.49 cents.

But straw votes are not set in stone, and some indicated after the meeting that they would bring up their own proposed spending increases or cuts again. Commission Chairwoman Jennifer Roberts took to Twitter to lament the loss of jobs coming for teachers, teachers assistants and possibly other county employees as a result of funding cuts made Wednesday.

Commissioners have until Tuesday to figure out what to do about the county’s tax rate.

Roberts, a Democrat, wants to use the extra money generated by the higher property tax collections to restore funding that the county cut from CMS and CPCC in 2007.

She wants an additional $40 million for CMS, an additional $2.5 million for CPCC and an additional $2.3 million for libraries.

Jones recommended using some of the increased property tax revenue to pay for raises for county employees, and his proposed budget includes funding pay raises based on performance. It also calls for restoring the 5 percent match to employee contributions to their deferred compensation accounts. Jones also is calling on funding to restore a portion of employee training that was cut over the past two years.

For Roberts and the other Democrats to get the spending increase they want, the tax rate would have to remain the same, at 83.87 cents for every $100 a property is worth.

The revenue-neutral club …

Some Republican commissioners want no spending increases and are leading a charge for lowering the property tax rate to make it revenue-neutral, so that no extra revenue is generated by the higher property values.

A revenue-neutral rate would mean the county raises the same amount of revenue from property taxes as it did before the revaluation. In fiscal 2011, the county collected property tax revenue of about $820 million. In order to collect that same amount from newly revalued property, the county’s property tax rate would need to be set at 78.83 cents per $100 of property value.

“The revaluation is not intended to increase revenue but rather to reappraise home values to reflect current reality,” Republican Commissioner Neil Cooksey said. “I do not think the citizens of Mecklenburg County need to pay more taxes and so therefore I am in favor of a revenue neutral tax rate.”

Commissioner Jim Pendergraph, a Republican, agrees.

“I can’t think of anything I would give extra revenue to right now, but there are some areas I would cut,” he said.

… And then there’s Bill James

Republican Bill James is a lone voice crying out for not a revenue-neutral tax rate, but a revenue-negative one.

For James’ idea of revenue-negative, in order to avoid a tax bill increase on the average homeowner the rate would need to be 41.95 cents per $100 of property value. But even James has expressed doubts that cuts would ever go that far.

Democrats disagreeing, too

As the Republican commissioners trumpet their budget plans, Democratic commissioners are disagreeing among themselves.

For one, Harold Cogdell’s budget proposal doesn’t line up with fellow Democrats’.

He is calling for a moderate tax rate, which he describes as in between keeping the current rate and revenue-neutral. Although he was reluctant to give a hard number, he indicated he would prefer keeping a tax rate close to the 82.49 cents per $100 of property value proposed by Jones.

But Cogdell’s spending priorities are close to Roberts’ list in that he wants to spend extra revenue on educational programs and raises and benefits for county employees.

Critics have said now is not the time to contemplate raises — performance-based or otherwise — for county employees. But Cogdell dismisses complaints about how many county residents in the private sector haven’t seen raises in the past two years, especially in a job market with a 10 percent unemployment rate. He sees it as less of a raise for parity’s sake and more of an investment in the county’s future.

“We need to maintain our skilled county employees who have not had a raise and had their benefits package reduced over the last three years,” he said.

Cogdell said it’s important to find a balance between sending a message to county staff that they are important and also sending the message to CMS that commissioners want to see success in the school system.

“I think we can do both things and look at some reduction in the tax rate from where it is now,” Cogdell said.

Scott Baughman can be reached at [email protected].