County avoiding tax hike; reserves to be used instead

Instead of raising the county’s property tax rate, the Fayette County Commission has decided to use its cash reserves to meet a $461,000 shortfall in revenue for the 2010-2011 budget year.

At Thursday’s commission meeting, it was noted that the county has about $6 million in uncommitted reserve funds available for just such a necessity.
Commission Chairman Jack Smith the previous week had made noise about increasing the millage rate to avoid the $461,000 shortfall based on concerns about future decreases in the county’s property values, which directly translate into shrinking property tax revenues.

But he spoke of a change of heart when the matter was discussed Thursday.

“We have been, over the last couple of years, accumulating reserves to prepare us for a rainy day such as this, and that rainy day is upon us,” Smith said. “I think it’s incumbent on us to do what we said we were going to do: use the reserves to curtail the impact on citizens.”

Commissioner Robert Horgan agreed.

“I think its the right thing to do for the citizens of Fayette County,” Horgan said.

There was no formal vote taken but none of the commissioners opposed the sentiment. A vote is expected at the commission’s Sept. 1 meeting, with a public hearing slated for citizens to have their say if they choose.

Next year, the county is anticipating additional property tax declines due to shrinking values particularly in the commercial sector, but they are not expected to reach the 8 percent reduction the county experienced this year.

The county’s 2010-2011 budget has taken an estimated $2 million hit in property tax revenue with a final adopted total of $73.4 million.

That figure is 1.4 percent less than the adopted budget for the current fiscal year.

Again this year the county will get by without any new staff positions or promotions. Last year the county eliminated 21.5 full-time equivalent full-time positions as a cost-saving measure, and it was noted at the time that county employees were bearing the burden of an increased workload to compensate for the lack of staffing.

In the proposed budget, another eight full-time equivalent positions have been eliminated through attrition, according to county staff.

Fayette’s property tax digest took a 7.9 percent tumble due in large part to the economy. Property taxes account for 61 percent of the county’s total revenues in the proposed budget.

Sales taxes, which comprise about 21 percent of the budget, have also dropped significantly, from $10.7 million in 2008 to an estimated $9.3 million this budget year, staff reported.

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