Mount Airy City Manager Barbara Jones presented her budget proposal to the city Board of Commissioners recently, asking for what we consider a rather hefty tax increase without any justification.
While her budget proposal leaves the property tax rate at 48 cents per $100 of assessed value, she’s proposing a new tax of $15 per licensed vehicle, with a third of that being general fund revenue for any use, while $10 would go into a restricted fund to be used for road maintenance, repair and construction (functions that are supposed to be done with general fund tax money).
No one likes a tax or fee hike, but sometimes those are necessary for public safety, or for a local government to maintain the level of services residents and businesses in a community expect.
We don’t believe that is the case here, simply because the city is sitting on a $12 million surplus, the same surplus it’s been sitting on for years.
Technically the money isn’t known as a surplus — it’s a year-end fund balance — but when all the annual revenue is collected, all the bills paid, what’s left, that fund balance, is at its essence a surplus.
It’s good to have a certain amount of money in that fund balance. Unexpected expenses crop up, revenue sometimes doesn’t meet expectations, and that fund balance can be a short-term bridge to meet obligations when these things happen.
But the city’s surplus is so large Mount Airy could run nearly a year without a single penny of general fund revenue coming in. That’s taxpayer money, not government money, and a surplus that large clearly shows the city does not need an increase in its tax rate, nor does it need to be imposing new taxes on its residents and businesses.
In the city budget proposal, Jones says the city will essentially operate at a deficit, not bringing in enough money in fiscal year 2016-17 to balance the budget, thus $3.1 million of that fund balance will be needed, reducing the surplus by a significant amount. If this were the truth, we might look more kindly on the proposed $15 fee.
We simply don’t believe the budget assertion that $3.1 million balance will be needed.
This is another annual Boy Crying Wolf exercise, when the city manager presents a budget proposal that shows the city needs to increase taxes or raise fees, that the city will have to start eating into that year-end fund balance to pay its bills. In recent years we’ve seen that proposal say anything from a couple of hundred thousand dollars to as much as $2 million of the surplus will be needed just to pay the regular bills.
Yet the city is still sitting on roughly the same $12 million fund balance it’s had for years.
Even this year, with less than two months left in the fiscal year, Jones admitted when pressed after the recent board meeting she wasn’t sure if the city would use any of the fund balance this year, as her budget calls for. At worst, she said the city might eat into about a million of the balance, even though the budget says the city will use around $2 million of that money.
We appreciate the idea that city officials, when formulating their budget, are conservative in their estimates, meaning they tend to budget for the highest possible expenses and the lowest possible revenue. This avoids nasty surprises halfway through the budget year.
The problem is, when a budget is so far off from reality year after year, no one believes the figures any longer. We don’t. We know a lot of city residents don’t. From comments we’ve heard over the years, we suspect a few of the city commissioners don’t, either.
The city administration has not, nor do we believe that it can, demonstrate a credible need for imposing this $15-per-vehicle fee on city residents and business. As such, we hope city commissioners remember, it’s the individual taxpayer’s money they’re holding in that surplus fund, and until there’s a true, honest need for additional general fund revenue, no increase in city taxes or fees should be considered.