Mecklenburg Money Bean Sprouts
Mecklenburg commissioners learned this week that county projections are pointing toward revenues exceeding budget by about $5.4 million for the current fiscal year, a dramatic swing from last February when the county was facing a shortfall of nearly $34 million, leading to steep mid-year budget cuts.
“We’re not now looking at any mid-year budget reductions,” County Finance Director Dena Diorio told commissioners Wednesday at the board’s planning retreat. “We really feel that the budget is structural and it’s sound and we shouldn’t have to deal with those issues over the course of the year.”
Democrat commissioners, who last year were criticized for bumping sales tax revenue projections by nearly $10 million to help fund select programs and services at higher levels, pounced on the news that their magic-bean money was apparently bearing sprouts.
“I hate to have to ask this question, but I’m going to ask it anyway,” chortled Commissioner George Dunlap. “Last year there were allegations that in adopting the budget we were pulling numbers out of thin air.
“But from everything you’ve suggested,” he told Diorio, “we’re either on target or above what the ultimate pool budget was.”
“Not so irresponsible, after all, were we?” chimed Commissioners Chair Jennifer Roberts.
“You got lucky,” deadpanned Commissioner Bill James, a Republican.
Lucky, yes; responsible, not so much.
Commissioners should have stuck with the lower revenue projections originally suggested by county staff during last year’s budget process and used any surplus to pay down outstanding obligations.
“We’re using it to pay for current operating funds that are digging us further into a hole,” said Commissioner Neil Cooksey, a Republican. “We’re paying for current wants instead of long-term needs.”
Keeping the budget within the constraints of original staff projections would have likely yielded a surplus where the revenues, Cooksey said, could have been more responsibly used to pay off a chunk of the county’s post-retirement fund balance, for example, which looms at about $30 million outstanding.
The county, in fact, will need to address close to $40 million in outstanding obligations alone for the new fiscal year budget, to include $22.7 million in fund balance debt service and $10 million in state-confiscated lottery funds. Some of that will be offset, Budget Director Hyong Yi said, by nearly $15 million the county banked this year for fund balance payback, along with $7 million in a debt service decrease because no major capital projects have launched recently.
Yet Democrat commissioners still felt compelled to roll the dice last year by increasing revenue projections, spending the phantom money on pet projects and popular programs right before an election that would see them retain majority control of the county board.
Who needs campaign funds when you have tax dollars to gamble with and buy votes?
So far this fiscal year sales tax revenues have rolled in at $47.7 million, for 34 percent of the total budget, and are about $2.7 million ahead of the take at the same time last year. The county, Diorio said, averaged $11.3 million in sales tax for the first four months of last year, compared to $11.9 million for the first four months of this year.
To meet budget for the current fiscal year, she said, the county would need to average $11.4 million per month in sales tax revenue from now until the end of June. County staff is projecting total sales tax revenue of $144 million, compared to the $139 million budgeted.
“We feel good, right now, that the sales tax numbers are going to hold for us,” Diorio told commissioners.
On the property tax side of the books, the county has raked in about $770 million, with a collection rate of 93 percent, Diorio said. To meet budget, the county will need to collect $49.9 million between now and the end of June. Comparatively, the county at this point last year had to collect $65.1 million.
The biggest hit the county has taken so far on the revenue front comes from its investment income, which is projected to tally only $2.7 million, slightly below budget. Last year, the county collected $3.8 million on its investments. Those numbers are down a staggering 88 percent since 2008, when the county hauled in $23 million from its investments.
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