Tax revenues higher than expected; budget items restored due to a $1.7 million surplus

Macon County Courthouse photo by Vickie Carpenter

Brittney Lofthouse – Contributing Writer

When planning for budget shortfalls due to the COVID19 pandemic, Macon County Manager Derek Roland took a conservative approach in predicting anticipated revenues. Roland cut county planned projects to accommodate for an anticipated loss in sales tax and property revenues. 

During a mid-year budget review last Thursday, Roland reported that not only did the county not experience a revenue shortfall compared to the same time period the prior year, but instead Macon County – and North Carolina as a whole – has actually experienced revenue increases. 

Sales tax was budgeted at a level 5.2% below the amount originally budgeted for FY ’20 that would have resulted in an original budget revenue loss of $1 million for Macon County. Through the first four months of FY ’21 however, sales tax collections are up 16% over 2020 actuals in Macon County and 11% statewide.  As a result of this trend, Macon County increased the sales tax revenue projections for the remainder of the year to the 2020 actual level.

“The collection rate for property tax and motor vehicles was reduced by 1% to 97.3% in the original budget based upon an anticipated reduction in property owners’ ‘ability to pay’ due to what everyone was certain would be a forthcoming recession,” explained Roland. “This was based upon guidance from NCACC [North Carolina Association of County Commissioners] and historical Macon County data following the recession in 2009.  As of Dec. 31, 2020, however, we are collecting taxes at the same percentage we did in the previous year, thus revenue projections for the remainder of FY ’21 have been increased to the prior year levels.”

Due to an increase in revenues at the mid-year review, Roland proposed county commissioners approve budget amendments for capital expenditures totaling just under $2 million. 

“Although much uncertainty remains for FY ’22, the $1.7 million in additional revenue gained from a ‘booming yet fragile’ economy enables us to restore capital funding to the priority areas of public safety and education,” said Roland. “It will enable us to begin working to identify and make recommendations for addressing inadequacies within our pay-scale in the coming fiscal year.”

Not only are other county revenue sources collecting at the same levels as the previous year — they are exceeding prior year’s levels. 

To begin FY ’21 a 10% decrease from FY ’19 actuals was budgeted for fees collected in Register of Deeds (ROD), building inspections and on-site wastewater and wells (OSWW) were based upon a projected declining economy.  Fortunately however, Macon County experienced the exact opposite:

July 1, 2020 – Dec. 31, 2020 

• ROD 70% higher than 2019 actuals 

• Building inspections 3% higher than 2019 actuals 

• OSWW and well fees- 64% higher than 2019 actuals 

Roland offered recommendations for the surplus.

“The operational funding necessary to offset cost overruns within certain line items of the operating budget that are beyond our control and restore funding to nonprofit agencies who have also played a critical role in helping Macon County combat the COVID-19 pandemic.  

“The $1.7M in additional revenue will leave us agile and in position to again take drastic measures, without adversely impacting the county employees, in the event that we are looking at another ‘worst case scenario’ for FY ’22,” said Roland. 

The majority of the revenue increase will go towards capital expenditures and is not tied to the operating budget.  An additional $911,259 in capital funding for Macon County will bring the county to $1,780,104 in FY ’21, which is in line with capital funding levels from prior years.  

“We will ‘make hay while the sun’s out’ if you will. … With respect to these capital expenditures, accomplishing as many as we can while the revenue is here to support it, but at the same time we will remain prepared to reduce the budget again in FY ’22 should economic uncertainty related to COVID-19 prevail, without adversely impacting the operating budget,” said Roland.

Roland proposed restoring capital funding to the school system to prior year levels, which will allow Macon County Schools to complete needed capital projects to improve the schools. The community funding pool was originally reduced by 50 percent in the budget, however, with the budget surplus, Roland proposed restoring the line item to original levels. 

The additional revenues will be allocated to the Sheriff’s Department to purchase the originally requested six new vehicles, as well as funding to complete the installation of in-car camera systems for all vehicles and body-cameras for Sheriff’s Office staff. 

Macon County Emergency Management will now be able to purchase a new stretcher and lift as well as an ambulance remounting and EMS coordinator SUV. 

The Macon County Board of Commissioners voted unanimously to approve the budget amendments proposed by Roland.