- Published on Friday, 04 May 2012 22:41
- Written by Super User
By WILLARD KILLOUGH III
CAROLINA BEACH - The Carolina Beach Town Council previously asked Town Manager Tim Owens to sharpen his pencil and reduce the cost to taxpayers when preparing the budget for 2012-2013 which begins July 1.
The Council will hold a public hearing at their May 8, meeting at 6:30PM at Town Hall to take public input after presentation by the Town Manager.
Owens explained earlier this week, "The Town Council recently discussed a variety of budgetary items to reduce the property tax rate down from a proposed $0.26" per $100 of property value.
Owens explained, "There was no clear consensus on all items that were proposed at the most recent budget workshop. With that said, I made $542,656 in adjustments which lowered the proposed tax rate to $0.235."
Owens said if the Council wanted to cut the budget further, they would have to direct him where to find $105,000 to drop the rate to $0.23 and $310,000 to drop the rate to $0.22.
Recently Owens proposed to increase the property tax rate 50% from 17.5 cents to .26 cents per $100 to be revenue neutral following the countywide property revaluation which reduced property tax values in Carolina Beach by around 35%. Being revenue neutral allows the Town to collect close to the same amount of tax revenues as the year prior to the revaluation and avoid experiencing a large funding shortfall. In an up-economy, being revenue neutral is supposed to prevent a Town from enjoying a massive funding windfall. Owens explained earlier this week in a memo to Council that, "As it is now, each one cent reduction in the tax rate would require an adjustment in the budget of $160,000 (upward revenue projection or a reduction of expenditures.)"
He explained, "The downward reduction of the tax rate also has ramifications. The Town's sales tax collections are currently estimated at $1,260,000 in fiscal year 2012-2013. In addition to the impact on the sales tax, the Town Council will need to make a tough decision on raising revenue for beach renourishment and inlet dredging in the very near future" as federal funding continues to be a jeopardy.
He explained, "As it stands now, the tax rate would be that vehicle for the estimated $350,000 needed for the Town to perform a beach project unless other revenues are sought or expenditures eliminated."
Sales tax distribution from the State is tied to the amount of property taxes the Town levies each year. The lower the rate, the less the Town gets back from sales taxes controlled by the State. For example, Owens says the revenue neutral rate is $0.26, but reducing that to $0.22 would result in a $200,000 loss of sales tax revenues.
Earlier this week Councilman Bob Lewis commented that, "During our most recent budget meeting the town manager in conjunction with members of council identified over $300,000.00 of potential under-estimated revenue projections for 2012/2013 from various sources. This simple
adjustment in projected revenues can immediately provide a 2-cent reduction in our projected tax rate for 2012/2013. This additional revenue along with a number of cost cutting measures identified at
the meeting estimated over $430,000.00 of potential cost cuts which could provide an additional tax rate adjustment if approved."
Both Councilman Lewis and Councilman Steve Shuttleworth commented on budget related issues on page 2-A of this week's Island Gazette.
Owens adjusted revenues from a Town owned hotel, recently increased parking fees, Room Occupancy Tax funds and Freeman Park
revenues. He also included eliminating expenses such as summer recreation leaders, a police lieutenant position, a part-time Human Resources position and reductions for other expenditures.
He also included transfers from reserve accounts to help balance the budget.
In previous years such transfers from reserves were budgeted, but never implemented and the Town continued to come in under budget for the fiscal year.
Owens explained in his memo to Council earlier this week that under a $0.235 property tax rate, 77% of property owners would pay less, 23% would pay more and 5% of properties gained value in the revaluation. He said of those, a number were built more recently in 2011 and 2012.
He explained that properties paying more based on the reduced revenue neutral rate would equate to around 520 properties paying less than $20 and at the bottom of the range, 357 would be paying more than $100 more on their tax bills for Carolina Beach.
New Hanover County is a separate property rate. The County is balancing the budget, in part, by proposing an increase in its rate from their current .46.55 cents per $100 in value, to .55.4 Cents in $100 value.