The Surry County Board of Commissioners made a difficult decision Monday night regarding the budget, one that no doubt leaves some in the county unhappy.
Nevertheless, we believe the board made the correct decision in keeping the county’s property tax rate the same, an effective tax reduction for many property owners in the county in light of the recent revaluation which saw land values lowered across the county.
By keeping the tax rate at 58.2 cents per $100 of assessed value, the board actually cut overall spending from the present $72.1 million budget to slightly more than $70.5 million. In so doing, the board rejected many requests for increased funding, and did not go along with County Manager Dennis Thompson’s suggestion of raising taxes by 3 cents to pay for certain purchases and capital funding needs.
The board managed to fulfill needed school-related capital spending, and did purchase some emergency services and law enforcement vehicles which had been requested. In order to cut overall spending and meet these requests, the board plans to dip into its year-end fund balance, using between $1 million and $1.5 million left over from the present year to help fund next year’s budget.
While it is laudable to keep tax rates the same — and we do believe each member of the board should be commended for their work in this budget — utilizing a portion of the year-end fund balance can only be practiced for a limited amount of time. Most accountants and county planners will tell you a locality needs a certain level of fund balance at the end of a fiscal year to cover unexpected expenses, or short-term expenses that might crop up before taxes and other revenue sources supply needed cash.
Already the county’s fund balance estimate of $5.3 million is less than 7.5 percent of the total budget, and if another $1.5 million comes out of that over the next year, it could stand at slightly more than 5 percent of the county’s total budget.
While this is legally a balanced budget, in truth it represents slightly higher spending than the county is taking in, and sooner or later that extra money will run out. At some point soon the county will need to take permanent steps — either by raising taxes or finding additional permanent cuts — to turn in a truly balanced budget that does not, in effect, live off of previous years’ savings.
For now the county has adopted a conservative, thought-out budget that keeps taxes at or below current levels and meets basic needs. With a new county manager coming on board soon, this would be an excellent time for the commissioners to begin looking at long-term needs for Surry County, and how to best fund them.
Then the board will have a long-range map to follow prior to the next budgeting season.