The Mount Airy Board of Commissioners is apparently considering a tax increase for the upcoming budget year, which begins July 1.
Either that, or cutting nine jobs from the city payroll, ending appropriations to outside agencies such as the Surry Arts Council, and other measures aimed at reducing expenses.
The reason is that City Manager Barbara Jones and her staff have presented budget proposals to the board that shows either the city makes those expense cuts, raise taxes, or it effectively operates at a deficit, pulling funds from the year-end fund balance (sometimes referred to as a budget surplus).
Commissioner Jon Cawley, among others on the board, has expressed concern with the idea of dipping into that fund balance to make it through the year, stating that’s bad economic policy and cannot be sustained indefinitely.
We agree. A city, or county, or business or individual home budget, cannot spend more than it takes in indefinitely. For a city like Mount Airy, it can only do that as long as the fund balance, or reserves, hold out. Again, not a sustainable, sound economic policy.
The problem is, when Jones and her staff say the city will have to slice millions away from the city’s reserve fund, few people believe her. This an annual cry, much like the boy who cried wolf so often no one came when a real wolf finally attacked him and his flock.
Every year Jones and her staff give city council the same argument — the city is going to have to cut services, increase taxes, or dip into those reserves. Sometimes that forecast has been that the city would be hundreds of thousands of dollars short, other times millions.
Yet the city is still sitting on an almost $12 million surplus, even though city commissioners sliced the tax rate from 63 cents per $100 of assessed value to 48 cents.
Whenever we or some resident of the city raises this issue, the response is predictable. First, we’re told we don’t really understand the budgeting process, that the administration budgets “conservatively,” which means it budgets expenses much higher than is realistic and revenue that is lower than is realistic.
It’s not really that uncommon of a practice, nor one that takes any specialized skill to grasp. Businesses do it all the time, as do many other governments. It’s actually a good philosophy. The problem is, when an entity is so far off the mark year after year, one has to question the leadership’s ability to do the job correctly, or their integrity.
And that brings us to the second predictable response. When someone, whether it be The Mount Airy News or a private citizen, stands up and asks if the administration is being fully truthful in its budgeting practices, the refrain is “don’t question my (or our) honesty.”
Well, it is a legitimate question.
In March, local resident Paul Eich approached city council with these very questions. According to figures he presented to city council — figures not disputed by the city — Mount Airy’s year-end balance has grown by $2 million over the past five years, despite the administration’s constant cry that city finances are in dire shape.
Eich said over that same five-year period the city has been off in its budget projects by $13 million, an astounding figure given that the city’s annual general fund budget is only around $12 million. That’s an average of $2.6 million per year, or nearly 22 percent. In no way should city commissioners, nor the residents of Mount Airy, accept figures so far off the mark.
Yet here we are, the same city administration giving voice to the same fear tactics — raise taxes, cut services and jobs, or watch the city’s fund balance take a sharp plunge.
We understand this year’s budget will cost more, if the city follows through with plans to give significant raises to police officers — an idea we wholeheartedly support.
And we know hiring a city marketing director (an absolute waste of tax dollars with no discernible purpose) would also bump up expenses a bit.
But we would suggest city commissioners might do well to hold the line on the tax rates, rather than increase the tax burden on city residents based upon some shaky and unreliable financial projections.
Even if the city staff gets it right this time and the city needs to dip into the reserve fund, even to the tune of $2 or $3 million, that would not be a major hit to the fund balance if action were then taken to address the revenue deficit. After all, that fund balance is nearly large enough to operate the city for a year without a penny walking into city hall. That money belongs to city taxpayers, and if some of it were used one time to balance the budget, keep the city tax rates lower one more year, that’s not a bad thing.