Amid all of the suspect activity coming from the Mount Airy Board of Commissioners — and there has been plenty — was City Manager Barbara Jones’ budget presentation calling for a 4-cent cut in city taxes last week.
Her proposal follows a directive by the board to include such a cut, and if adopted, will represent the board fulfilling a commitment it made several years ago to reduce the city tax rate by 10 cents over a five-year period. This latest round of reductions would put the city tax rate at 48 centers per $100 of assessed value.
It is good to see that the commissioners have stuck to their word and pursued the 10-cent drop in tax rates through some of the most challenging financial times in memory.
The one area of concern this proposed cut raises is the fact that it’s based upon dipping into the city fund balance, which stood at nearly $12 million at the close of the fiscal year which ended June 30, 2013.
As we’ve discussed before, that fund balance is probably a bit too large, given the city’s proposed general fund budget is about $13 million. That’s not a criticism — Jones and the commissioners have managed the budget extremely well over the past several years, and it has been through that efficient management that the fund balance has ballooned to its present figure.
This also clearly shows the tax rate was higher than it needed to be with proper management.
However, this proposed tax cut, along with other expenditures, is projected to take a $2.5 million bite out of that fund balance, according to Jones’ budget proposal. While granting that tax cut, and reducing the bloated surplus in a manner that returns the money to taxpayers are laudable goals, the city cannot find itself relying on the budget surplus to meet annual operating needs.
If the commissioners move forward with the 4-cent tax cut, and we hope they do, it is imperative a long-range sustainable method of paying for this be identified now, rather than later after the surplus is drawn down. To do otherwise could leave the board in the position of having to raise taxes again two or three years down the road.
And no one wants to see that.