Gov. Mike Easley announced a series of measures Feb. 5 to deal with the state's $900 million budget shortfall, including seizing the payments due to N.C. counties and cities.
The county is facing a loss of $712,258 to $862,000 this year, which comes in addition to a $1.3 million shortfall expected by the county next fiscal year.
In an attempt to spare county funds, some budget items might be postponed or reduced to offset further deficits. Items that officials might delay for the time being include county contributions to the Affordable Housing Fund and the purchase of information technology-related equipment for county offices.
The maximum amount that could be saved by delaying funding for these projects is $885,200, but these items will not be left entirely without funding this year. The county has a $13.2 million reserve fund, which is money saved for emergency situations.
To deal with the predicted $1.3 million shortfall, county officials already have decided to enact a half-cent sales tax starting July 2003, potentially generating $500,000 to aid the shortfall recovery on the local level. The tax was originally taken for the state but will go to the county in the future.
Orange County Manager John Link said he is worried the money the county gets from the sales tax will not be enough to cover its budget cuts because the tax is based on consumer spending in a struggling economy. "What I am most concerned about between now and the end of the fiscal year is the sales tax because we can't predict how much it will generate."
During the meeting, Orange County Budget Director Donna Dean presented a computer presentation listing possible places to save money in the coming year with a minimum of disruptions.
Dean said affordable housing will not suffer from the delay of its annual $250,000 contribution because it has funds left over from previous years. Postponement of the purchase of information technology equipment also will not be an inconvenience because it is already in the last stages of a four-year replacement cycle.
Commissioner Barry Jacobs addressed the possible burden of $185,200 that could be placed on the county's two school districts but said it is significantly less than the county's burden at this time. "The county will be accounting for two-thirds of the shortfall, and we're only asking the schools for one-third, which is reducing their recurring capital allotment for one month."
