Officials work to trim tax hike

The Orange County Board of Commissioners heard advice Tuesday from county staff on how it might go about trimming what amounts to the largest tax increase in years.

Staff demonstrated how, penny by penny, the recommended 9-cent tax increase could be cut, but County Manager John Link warned commissioners not to strike too deep.

While he says the tax could feasibly be trimmed down by 6.5 cents, he has recommended the cut remain at about 2 cents.

“The consideration of cuts to 3 cents or beyond will seriously erode” budget priorities such as capital funding for both county and city schools, critical-needs reserve, the county employee pay plans and school funding, Link’s report stated.

Commissioner Barry Jacobs said he aims to cut the tax by one-third, while at the same time increasing school funding.

“I think the obvious place to look is capital,” Jacobs said.

Recurring capital funds for the schools and county represent the first penny on the list to be cut. These funds were recently reinstated into the budget and totalled over $1 million that would have been earmarked for ongoing maintenance.

A 3-cent cut would trim employee compensation by about $500,000. The manager’s recommendation calls for $1.5 million in employee benefits, including a 2.5 percent raise in both cost of living and in-range salaries, as well as increases in 401K contributions and living wage for temporary employees.

In the wake of recent criticism from county employees who feel they might have been overlooked for pay raises, commissioners reiterated their support for employees.

“There seems to be this huge gap between what we did and what people understand we did,” commissioner Stephen Halkiotis said, citing what he said was more than $1 million in county contributions to employees in the last three years.

“It’s like these people didn’t get communion,” he said.

Personnel director Elaine Holmes suggested that the criticism might be the result of a misunderstanding about which employees were eligible for pay raises.

By the third penny, staff also project the need for large cuts into school funding. Three cents, staff say, could require a $23 reduction in the schools’ per pupil allocation, now $95. This would remove over $400,000 from school coffers.

On May 31, droves of parents poured into the Southern Human Services Center to demand that commissioners fully fund the schools budgets.

Many said they would be willing to front the additional 4.5-cent property tax increase, which Link said would be necessary to fully fund the school budgets.

Jacobs said he was “not considering that whatsoever — not on top of what the manager is recommending.”

But he did say that he supported increasing school allocations above the current $95 per student.

Perhaps as way to find those additional savings, Jacobs asked staff to identify areas where the county was “picking up the slack or diminution of generosity” from the state rather than “assuming them right into the budget.”

During fiscal year 2005-06 county staff have projected that the counties Medicaid costs could increase by more than $500,000 as a result of state cuts. North Carolina is the only state that requires counties to fund Medicaid.

The commissioners are expected to pass the 2005-06 budget by June 23.

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