Lenoir County facing budget shortfall

Unless there is a major economic turnaround soon, Lenoir County officials will have to make some difficult budget decisions next year, especially with multi-million dollar annual debt service payments for the debt taken on for the county jail expansion and school construction bonds.

The county has an $80.6 million budget for the current fiscal year, which ends June 30. Department heads and county commissioners held their first budget worksession Monday for the 2012-2013 fiscal year, which begins July 1.

County Manager Mike Jarman told county commissioners there could be a shortfall of more than $800,000 in the revenue dedicated for school bonds, and no revenue has been dedicated to jail debt payments beyond the 2013-2014 fiscal year — the county has saved enough money to make jail debt payments before then.

The total projected debt service payment for next year is $8.2 million. With cutbacks to state funding — including Education Lottery dollars — a reduction in sales tax revenue due to the economy and new unfunded state mandates, county officials either need to find new revenue sources or make significant spending cuts.

“The county is still in sound financial condition, but we just need to look at the debt service,” Jarman said. “We’ve been talking about it for several years and we just need to look at it with multiple years in mind.”

The county manager told the commissioners he, his staff and county department heads are developing a budget plan with no tax increases, which shows the impact of cuts.

“The train's left the station, but we can show you where it's fixing to come off the tracks,” he said.

George Graham, chairman of the Board of Commissioners, floated the idea of a quarter-cent increase in county sales tax during Monday’s work session.

He had suggested it last year, but the idea went nowhere. County voters overwhelmingly rejected a sales tax increase in a referendum several years ago.

Graham said county officials, as well as other civic leaders, should work to sell voters on the benefits of increasing the tax.

“More and more counties around the state, and around us, are moving forward with that concept,” he said.

Commissioner Reuben Davis suggested county leaders “let the community come back to us and tell us what needs to be done.”

Commissioner J. Mac Daughety said officials need to discuss and plan how they want the county and its schools to look in eight to 10 years, and make investments accordingly.

“In the end, how we get there, how we pay for it, is based on this year’s budget, next year's budget,” he said.

Commissioner Eric Rouse said county leaders need to realize “this is our household and we need to live within our means.”

“Instead of us investing in Lenoir County, other people start investing in Lenoir County,” he said. “That's what I want to be mindful of going forward.”

Jarman told the commissioner county agencies and residents could see an immediate impact of a cutback in spending — as an example, Lenoir County EMS must replace at least one ambulance a year to keep the fleet in current shape.

“Additional revenue is going to be needed in the future and you're going to have to plan for it,” he told them.

David Anderson can be reached at 252-559-1077 or danderson@freedomenc.com. Follow him on Twitter at DavidFreePress.

BREAKOUT BOX:

Total Lenoir County debt service payments for the next five years:

n 2012-2013: $8.2 million

n 2013-2014: $8.1 million

n 2014-2015: $8 million

n 2015-2016: $7.8 million

n 2016-2017: $7.5 million