Acknowledging the slimming economic capabilities of New Hanover County, Chairman Ted Davis vowed Monday, Nov. 16, to continue the struggle of maintaining services in the face of steep budget cuts and cascading revenue sources.
During his 15-minute State of the County Address, Davis applauded the efforts of his fellow commissioners, striking a candid tone that was seemingly designed to create a framework of forward thinking.
“The economy has posed significant challenges for all of us personally over the past year or so, and your county government has been no exception,” Davis said. “Fortunately, I can report to you today that through our strong focus on fiscal responsibility at all levels of county government that New Hanover County is in sound financial shape.”
Davis addressed a New Hanover County courthouse assembly room filled with several employees waiting to be recognized for their many years of service.
County employees have trudged through a muddled year, staring down the barrel of layoffs, furloughs and a reduction in accruals of personal time off.
Davis didn’t shy from touching on the burdens placed upon county employees, weaving those comments into a general acknowledgement of the “sacrifices” New Hanover County was required to make in the 2008-2009 fiscal year.
Those sacrifices included a reduction in capital and operating expenditures for county departments, schools, Cape Fear Community College, the Southeastern Center for Mental Health and the court system.
Reducing expenditures is part of a series of steps the county took to minimize the economic impact on its citizens while cushioning a sharp drop in revenue.
Still, the county was forced to dip into its emergency reserve fund balance, borrowing some $2.5 million for regular operating costs.
“The purpose of that fund balance is to have those cash reserves on hand in case of an emergency,” Davis said, “and those economic conditions that we face during that fiscal year certainly justified the use of those funds.”
Davis warned of even stingier times in the months ahead, congratulating the “dedicated efforts” of county employees but offering a blunt outlook of the future.
This current 2009-2010 fiscal year, which began July 1, saw a drop of 8 percent—or $21 million—in expenditures over 2008-2009.
These enormous cuts, Davis said, will likely lend to increased personnel furloughs and layoffs, and additional closing days for county offices.
The economic fallout of the past year has cast a wet blanket across every level of government. Revenue has plummeted, which in turn has been met by an ever-increasing demand for services, placing the millstone on a thinning government staff.
Sales and room occupancy taxes are down 14 and 8 percent respectively, Davis said, pulling the rug out from under the local retail and tourism industries.
Deed registration, an indicator of real estate activity, has also toppled 33 percent.
Inspections revenues—which track commercial and residential construction—also took a punch, buckling 29 percent.
Meanwhile, the county’s unemployment rate hovers around 9.2 percent, still lower than the state’s rate of about 11 percent.
Despite disenchanting statistics, the county remains confident.
“While all these indicators are presently down, New Hanover County remains optimistic that the efforts we have taken will meet our current needs,” Davis said, adding that the county has retained an AA bond rating, allowing it lower interest payments on its debts.
Grant and stimulus dollars have infused the county with much-needed development projects, and voter-approved bond referendums have allowed for investments in schools and parks.
Turning his sights toward the future, Davis declared that the county will continue seeking stimulus funding and green initiatives, like the development of renewable energy and public safety projects.
He also said the county will be releasing about $17.5 million in park bond money to make improvements to parks around the county.
In the May primary, voters will be given the opportunity to endorse a .25 cent sales tax increase, which—if approved—is expected to rake in about $7 million annually.
During his address, Davis dauntingly urged voters to approve the additional sales tax
“Such a sales tax,” he said, “would provide the commissioners with valuable income during the budget process when this board has the difficult decision of whether or not to raise ad valorem property taxes in order to pay for the county’s expenses.”
A .25 cent sales tax increase is equal to about 2.1 cents on property taxes, Davis said.
