Roland: Thriving local economy, increased property values leaves Macon County in good fiscal shape

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Brittney Lofthouse – Contributing Writer

During a continuation meeting of the Macon County Board of Commissioners held on May 26, Macon County Manager Derek Roland presented his recommendations for a $59,047,113 budget proposal that would keep the county’s current tax rate at 40 cents per $100 of assessed property valuation. 

“Right now,  the local economy in Macon County is booming,” said Roland. “Residential and commercial development, retail sales, travel and tourism spending and real estate sales remain at levels unsurpassed in over a decade while unemployment is approximately 3%. Population growth in Macon County of 1.5 percent from April 1, 2020‐July 1, 2021 well exceeded that of the southwestern region at .92 percent for the same period.”

Roland informed commissioners that the resilient local economy is projected to result in an increase in revenue for Macon County, which he said will allow the county to address competition, increase demand and rising service costs and economic viability. 

“In addition to organizational improvements, increased revenue will enable us to continue moving forward with critical infrastructure investments in public education,” said Roland. 

Population growth, economic development and a shift towards online spending continues  to drive sales tax growth in Macon County. At an estimated $12,173,788 or 21% of total revenue in FY ’23, sales tax revenue will increase by $1,647,742 or 15.7% over the current fiscal year original budget amount.

While the economy in general is producing more revenue than prior years, much of the county’s new revenue comes in ad valorem property tax collection due to an increase in home values. Ad valorem property tax is the primary source of revenue in the general fund accounting for $31,169,114 or approximately 57% of total revenue in FY ’23. This amount is representative of a $502,938 increase in revenue over the current year’s original budget. The increase in revenue is attributable to a combined increase in collection percentage, +.22% and value +$110,160,339, over the prior fiscal year original budget. Gross receipts, not reflected in ad valorem property tax will increase by $4,000 over the current year budget amount.

While the county’s ad valorem tax rate remains flat, Roland did propose increasing the county’s budget by $2,365,895 or 4.2 percent. 

“Increases within the operating budget will enable the organization to remain competitive in recruitment and retention of high quality employees, offset rising costs of doing business, and meet increased service demand,” said Roland. “Capital expenditures will result in gained efficiencies, enhanced recreational opportunities, equipment upgrades and a continued commitment to public education in the coming fiscal year.”

Roland proposed adding two part-time environmental health technicians in the coming fiscal year as well as reinstating an Administrative Officer III position in public health. 

After comparing data from surrounding counties, Roland proposed implementing step pay increases for county employees to remain competitive. 

“In order to continue providing high quality public services in light of growing demand and increased competition, Macon County must continue taking steps to ensure that employee compensation remains competitive,” said Roland. “The FY ’23 recommended budget proposes a one‐step advancement in the pay scale for all full‐time employees and a 3% cost of living (COLA) adjustment for all employees. The one‐step advancement amounts to an approximate 1.5% increase per employee resulting in a $198,489 increase to the FY ’23 Budget. A 3% COLA will result in an FY ’23 Budget increase of $726,571.”

To address capital needs across Macon County, Roland recommended establishing a “pay-go” program moving forward. In FY ’23 capital expenditures will account for $4,168,970 or 7% of the FY ’23 recommended budget. This is an increase of $1,286,428 over the current fiscal year original budget.

$1,317,582 of FY ’23 recommended capital expenditures is representative of County “Pay‐Go” capital. “Pay‐Go” is short for pay‐as‐you go. 

“The Macon County Capital Improvement Plan establishes a $1.3M threshold for annual pay-as-you go capital expenditures,” said Roland. “Remaining within this threshold ensures the county can continue addressing annual capital needs within the organization, build debt capacity to take on future capital projects and meet annual capital needs within the Macon County School System.”

Of the remaining capital expenditures, $882,007 in the Transit function will be offset by grant revenue and $1,969,381 will go to the Macon County School System. The school system appropriation of $819,381 will be a transfer to fund 46, in anticipation of continued planning and design efforts at Franklin High School. An appropriation of $1,150,000 will be set aside for technology and capital outlay.

The Macon County School System requested a flat appropriation for current expense in FY ’23. The FY ’23 recommended budget at $8,875,731 consists of current expense, teacher supplements, solid waste fees and timber receipts. Consistent state and local funding combined with COVID‐19 relief funding will ensure the School System remains well prepared for uncertainty in the coming fiscal year.

“On March 8, 2022, Macon County Board of Commissioners unanimously passed a ‘Resolution Calling a Special Advisory Referendum for the Levy of a One‐Quarter Cent County Sales and Use Tax.’ The Article 46 1⁄4‐cent sales and use tax question will appear on the November 8, 2022, general election ballot,” said Roland. “Currently 44 counties across the state have voted to implement the Article 46 1⁄4‐cent sales and use tax, including six of seven counties in the Southwestern Commission Council of Government. If approved by voters in November, the additional 1⁄4 cent would generate approximately $1.8M in annual revenue for addressing capital needs in the Macon County School System.”

Commissioners will weigh in on the budget during a budget work session on Tuesday, June 7,at 5 p.m. Roland’s proposal serves as a recommendation and is scheduled to receive public comment during the next meeting scheduled for June 14 at 6 p.m. 

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