Chowan OKs 10-percent budget cut, 9-cent tax hike

By Connie Sage

Correspondent

EDENTON, N.C.

Chowan County commissioners approved a 9-cent property tax rate hike and cut services and personnel Thursday night as a standing-room-only crowd of 800 residents jeered and booed.

Commissioners also agreed to let voters decide in November whether to increase the local sales tax by a quarter of a cent to help the county out of its fiscal mess.

Both moves were aimed at resolving a budget crisis that came to light last month and threatened to put day-to-day operation of the county government under state control.

The majority of the nearly two dozen Chowan County residents who spoke after County Manager Peter Rascoe's presentation said they didn't want any tax hike. They drowned out with insults anyone who expressed support of him or county commissioners.

Several attending the meeting gave up their time during the public

hearing to Edenton resident John Sams, who said to applause and cheers that the commissioners needed to earn the trust of citizens.

Commissioners were taunted after telling Sams his time was up.

"We don't have money, but we do have time," yelled one man from the audience.

Commissioner Jerry Downum snapped at Sams, asking, "Why don't you come to the meetings and help us?" as some onlookers applauded and some booed.

Builder Paul Waff tried to defend the work that Rascoe had done since learning in the past month that the county didn't have enough cash to pay its bills.

"What's your point?" someone in the crowd yelled.

"That we're all in this together," Waff said.

"No we're not," hissed several people, interrupting Waff.

Josette Beasley Carter stood at the podium and told commissioners that citizens are "being compelled to pay for a crime we didn't commit." Onlookers applauded.

At the end of the meeting, Vice Chairman Jimmy Alligood scolded those he said moved here "in the last four or five years and took advantage of our low tax rate."

As the audience threw insults, Alligood made a motion to amend Option 2, which was presented among four possibilities last week. The amended option calls for a 9-cent tax hike, one cent less than the original would have.

"I'm embarrassed to listen to this," Commissioner Kenny Goodwin said. "It's not a joke. We don't need to have the state come in here and take us over." Some in the crowd shouted, "Yes, we do."

Commissioner Bill Gardner said he supported the amended option.

"Why?" yelled someone in the audience as the crowd booed.

"Because it's the right thing to do," Gardner replied.

Many in the audience jeered.

A vote was quickly taken by the commissioners, who unanimously approved the tax hike, which will be added to the current rate of 56 cents per $100 of assessed property value.

The amended option was approved so quickly many people did not realize that the commissioners had adjourned the meeting and were unsure which option, if any, their elected officials had approved.

Before reviewing options to come up with money to balance the budget, Rascoe told commissioners that "Chowan County will run out of operating cash in September" and had to comply now with demands from the state's Local Government Commission.

"We cannot remain out of compliance" with state law, he said, but he assured them that "if the county's finances improve, I'll do everything to reinstate" services and personnel.

"Any reduction is temporary," he said.

The original Option 2 called for more service and personnel cuts than the amended one approved Thursday.

Last week, Rascoe presented four budget proposals that ranged from no tax increase and massive cuts in services to a 19-cent increase with no cuts.

The new tax rate will include 1.5 cents that will go into a contingency fund for emergencies, such as a natural disaster.

The state and county sales-and-use tax would inch from 6.75 cents to 7 cents per dollar if an increase is approved in a referendum in November's general election. The county would raise about $150,000 a year in additional revenue with the sales tax increase.

The new budget was approved as the fiscal problems are being investigated by two state agencies.

District Attorney Frank Parrish last week asked the State Bureau of Investigation's Financial Crimes Unit to look for any possible criminal misconduct. A t the direction of the commissioners, County Attorney John Morrison this week asked the Office of the State Auditor to also look into the budget problems.

In addition, the Local Government Commission is working with the county as it tries to balance a new budget.

The LGC told county officials in a July 24 letter that revenue estimates for the current budget, approved in June, had been overstated by $4 million.

The fiscal watchdog group, a branch of the Department of State Treasurer, said money was being pulled from reserves, essentially the county's savings account, to cover budget shortages.

The county was told it must come up with a balanced budget or face possible state takeover of its day-to-day operations.

Former County Manager Cliff Copeland, who retired in June, said he was borrowing money internally - with commissioners' approval - from a reserve fund. The loans are receivables and would be paid back, he has said.

Revenues from anticipated growth did not materialize to repay the loans, he said.

Rascoe told commissioners Thursday night that debt payments due next year are

not part of this year's budget and the county could be faced with an additional 6- to 6-1/2-cent tax rate increase next year.