AMHERST — In response to growing concerns over the coronavirus, the Amherst County Board of Supervisors on Monday declared a local emergency and unanimously voted to slow down the county budget process to assess the pandemic’s effects on the local economy.
The board initially was scheduled to hold a public hearing on the fiscal plan April 27 at Amherst County High School. Supervisors have pushed back the schedule and will hold the hearing June 2 and are now set to adopt the new budget June 16, a few weeks before it becomes effective and more than a month later than normal.
County Administrator Dean Rodgers said at a budget work session Monday the county’s biggest concern is a reduction in revenue. While most of the county’s money to operate comes from the real estate tax, he said, economic activity across many businesses, restaurants and stores will be affected.
“How hard will it hit us? We don’t know to what degree,” Rodgers said. “We want to take a couple of months and see how the revenue comes in and how much it will be adjusted.”
Chairwoman Claudia Tucker said a declaration of emergency is important for taking advantage of any potential monies available to the county and residents. “I would hate to put our folks in that position,” Tucker said of potentially missing out.
In a March 23 memo to Rodgers, Finance Director Stacey Wilkes wrote the virus has caused much uncertainty in the current budget and the proposed upcoming fiscal year's plan. With revenue sources impacted, she immediately recommended county staff be advised to limit any non-essential purchases through June 30.
“I have seen our staff taking on the unprecedented tasks associated with the changing conditions related to COVID-19,” Wilkes wrote in the memo. “… Staying conservative in our spending, monitoring the changes in revenue and adapting our budget process to the quickly changing economic environment is crucial in aiding the citizens of Amherst County and maintaining our commitment to fiscal responsibility.”
Supervisors have been seated further apart than usual at recent meetings to practice social distancing.
Wilkes during a March 17 budget work session reviewed various assumptions over the next six years that include a planned 3% raise for county employees per year, public safety and sheriff’s office salary scales starting at $40,000, adjusting salaries for many county staff positions and a planned 6-cent increase in the real estate property tax rate.
Supervisors have made no final decisions on a potential tax rate increase and have discussed a 2-cent and 4-cent hike as well in budget discussions in February and early March.
According to the projections, the county would face a $431,533 deficit in fiscal year 2026, though Wilkes noted many factors are likely to change and she expects that shortfall can mostly be absorbed. With all the “very conservative” projections, she said the planned budget measures to create additional revenue would last through late fiscal year 2025.
If the board enacts a 4-cent tax increase, the forecasted revenue to balance the budget would last through fiscal year 2023, Wilkes told supervisors. A 6-cent increase per $100 of assessed real estate value would bring an annual added expense of $135 to a home valued at $150,000, the county average, while a 4-cent hike would yield $105 in added cost, according to the county.
Rodgers said the county is hopeful for savings in the proposed capital improvement plan of just more than $1 million and could pursue other tax options in upcoming years, including more flexibility in meals and cigarette taxes opened up to counties following the recent General Assembly session.
“I think 6 cents is a huge ask for everybody in this community,” Supervisor David Pugh has said in voicing his opposition to potentially raising the real estate rate.
Pugh said forecasting years out with many unknowns is speculation and the many economic ripple effects of the pandemic, depending on how long it lasts, could place a strain on the county’s planned tax revenue.
Rodgers said the county is projecting a “modest” 2% increase in county expenses and staff is trying to plan ahead. “I don’t think it’s fair to assume the price of things will go down,” Rodgers said during the March 17 session.
“If we don’t do anything, if we change nothing … everything it takes to run the government goes up an estimated 1.5 to 2% every year. Nothing we can control,” Tucker said. “It’s just the way it is. Lord help us if we have any more of these mandates that have cost us hundreds of thousands of dollars.”
Supervisor Jimmy Ayers said a potential tax increase would be felt among citizens. “It’s a lot of money for a lot of folks,” Ayers said. “We need to be mindful of that.”
Rodgers spoke of the “political heat” supervisors are facing from the potential move. “If we’re wrong it’s easier to lower taxes than it is come back and raise them,” Rodgers told the board. “You will have an opportunity this year to look at other taxes, other revenues.”
Supervisor Tom Martin said getting county employees up to the market average in compensation and attracting and retaining quality workers is important for the county to stay competitive regionally.
“I agree raising taxes is going to be a hard burden to bear for our citizens — yet I think we also have a responsibility for [providing] good government services,” Martin said.
The board has to weigh whether it will “hang our hat” on another potential move such as a future cigarette tax, for example, to create more revenue apart from the real estate tax option, Martin said. “We’re going to have to plan for it now or drop back and punt later,” he said.
Martin said what keeps him up at night is if the board raises taxes based on worst-case budget assumption and years down the road a future board of supervisors doesn’t return the money by lowering the tax rate.
“There’s always more stuff to do,” Martin said. “The other way to do it is cut expenditures. I’ve looked at the budget and I don’t see where we’ve got extravagances.”
While presenting the Amherst County Public Schools’ recently approved $50.8 million budget to supervisors Monday, Superintendent Rob Arnold said the division’s biggest budgetary worry with the coronavirus is the effect on the sales’ tax, a revenue source that affects school divisions. He asked supervisors for more flexibility with using leftover money at the end of the fiscal year for operational spending, as that typically goes to the division’s capital improvement plan.
“We just want to make sure we are covered and can take care our employees and our staff,” Arnold said of preparing for the fiscal impact.