OC Commissioners to Raise Taxes by 2 Cents to Pay for Schools

By Danny Hooley Posted June 13, 2014 at 4:48 am

Orange County residents will likely see a two-cent increase in general property tax to help fund schools in the next fiscal year.

On Thursday night, commissioners meeting for a public work session at Southern Human Services Center in Chapel Hill moved to fully fund local school systems, despite some of the back-and-forth admonishments over the past few weeks over funding requests. And they came very close.

The $200.4 million expenditure budget that will be up for a final vote on June 17 includes a General Fund school appropriation of $72.1 million, which equates to $3,571 per pupil in both the Chapel-Hill-Carrboro and Orange County School systems.

Additional funding would amount to $7.1 million – enough to fully fund the Orange County Schools request, and, according to Commissioner Chair Jacobs, get about 90 percent there for Chapel Hill-Carrboro Schools.

Finding a solution to funding challenges was made a little easier with the news that Orange County’s projected unassigned fund balance for fiscal year 2014-15 is $35.3 million, or 18.8 percent of the general fund expenditure.

According to Orange County’s policy, the unassigned fund balance should be 17 percent of the General Fund. The current fund balance exceeds that goal, by 1.83 percent, and the projected excess amounts to $1.9 million.

On a related note, Interim Manager Michael Talbert informed commissioners that they will see an agenda item next Tuesday that reflects the county’s new Triple-A Rating.

A refinancing of the county’s debt will be proposed, and Talbert said it will save the county $838,000.

“That wasn’t possible three weeks ago, because our Triple-A rating wasn’t here,” said Talbert. “With the Triple-A rating, we’re going to get much better borrowing rates as we go forward with school needs, older school needs, and a potential bond referendum.”

Still, in the here and now, Commissioners needed to decide the matter of raising the general property tax for the first time in six years to help fund schools.

With $1.9 million of excess funds, and the manager’s recommended $2.9 million increase to work with, Commissioners and financial staff started doing the math.

After some discussion, two options came up for a vote. One idea was to raise the general property tax by 1.75 cents and use $1 million from the fund balance excess.

Commissioners Renee Price and Earl McKee supported that option. McKee said that a second proposal – a two-cent tax hike – was a “psychological step” for a lot of people, and it made him uncomfortable.

“We have a lot of people in Orange County that live in modest and lower-income homes, that own these homes, that are living paycheck-to-paycheck, day-to-day” said McKee, “that are having a hard time putting food on the table, much less any of what many of us take for granted, including myself.”

But Commissioner Mark Dorosin reminded everyone that the Orange County budget will already be on the books when the General Assembly budget is passed in coming weeks.

“Give the fact that we know there’s likely to be some more bleak scenario coming out – there are going to be other cuts that are going to have to be made, and tough decisions that will be coming,” said Dorosin. “And I trust the two school boards recognize the reality of that situation. So I’m in favor of the two cents.”

In the end, it was a two-cent tax hike, supplemented by $911,000 from the fund balance, which passed 5-to-2.

Afterward, Chapel Hill-Carrboro City Schools Superintendent Tom Forcella and Board of Education Chair Jamezetta Bedford, who were in the audience, said they were happy with the outcome.

“This is a very positive budget for education in Orange County,” said Bedford. “I’m very pleased.”

Forcella praised the commissioners.

“I think we’re very fortunate to have a Board of County Commissioners who support public education, especially in light of what’s been happening in Raleigh,” said. “So they came through for us, and we are very, very appreciative.”

The Orange County Commissioners will vote on adopting the budget resolution on June 17.

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