Chowan County weighs deeper spending cuts

By Connie Sage

Correspondent

For weeks, Chowan County commissioners have whittled away at a $3.5 million budget deficit. So far, they have pared all but $453,000 from the projected shortfall for the next fiscal year.

Taxpayers would see their property tax rate increase by 3 cents per $100 of valuation. Nineteen county jobs would be eliminated or frozen, the public library would be closed on Saturdays, the state would be asked to take over Edenton's 1767 courthouse, all county capital expenses would be axed, nearly all maintenance and repairs would be shelved, and the building that houses the county manager would be vacated.

And the commissioners aren't done yet.

After taxpayers have their say at a public hearing Wednesday night, additional cuts may be made to eliminate the budget gap altogether. Still more cuts would be required if the proposed increase in property taxes is reduced or abandoned.

Or, commissioners may reinstate some jobs and services that they've tentatively dropped. That could mean a property tax rate increase of 5 or 6 cents.

Whether taxes are raised or programs trimmed, commissioners are confident that the process to balance the county's 2009- 10 budget is the most transparent in years - perhaps ever.

The open budget workshops, which started May 7, have been a learning process for everyone, said Commissioner Keith Nixon. "I'm trying to make sure we've looked at every possible way to trim down and live within our means," he said.

Commissioners have gone line by line looking at departmental expenses and revenues as they struggle to keep a lid on taxes and maintain services that already have been reduced in the past year.

The county also is trying to refill a $20 million reserve fund that had been nearly depleted without the apparent knowledge of commissioners and the current county manager. An investigation by state auditors into possible criminal misconduct is in its ninth month.

When commissioners vote on the budget, one thing is all but certain: It won't be unanimous. Commissioners Kenny Goodwin, Keith Nixon and Emmett Winborne want no tax increase. Commissioners Jimmy Alligood and Louis Belfield are OK with a tax increase if it stops the hemorrhage of county services and personnel.

"Everything from A to Z has to be looked at," said Chairman Eddy Goodwin. "There are two ways to generate revenue: increase taxes or cut expenses."

While it's still possible to avoid a tax increase, he said he's a realist.

"If there has to be a tax increase, it should be minimal."

County taxpayers currently pay 65 cents per $100 of valuation. Edenton residents pay both county and town taxes, for a total of 94 cents per $100.

The county has $830,000 in reserves - $330,000 it has built up since last year and $500,000 remaining from the $20 million fund.

"We expect the county to maintain these reserves in case of emergencies," said Vance Holloman, deputy treasurer of the state Local Government Commission's State and Local Finance Division.

With its current budget of about $16 million, the county should have about $1.3 million in reserves, based on Local Government Commission guidelines. Statewide, the average fund balance for counties of similar size was 23.6 percent at the end of the last fiscal year, Holloman said. Chowan's reserve is about 5 percent.

The LGC has the authority to assume control of the finances of a local government if it's about to default on a debt or if it repeatedly violates state statutes, Holloman said.

Chowan County has done neither, he said.

"There are no thoughts of assuming control of the finances of the county at this time."