Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 13, 1991 TAG: 9104130486
SECTION: VIRGINIA PAGE: A-3 EDITION: METRO
SOURCE: MARK LAYMAN STAFF WRITER
DATELINE: LENGTH: Medium
That might not be so the following year.
County Administrator Elmer Hodge gave the Board of Supervisors a glimpse of revenue and spending projections for 1992-1993 this week, and it was a shocker: a potential shortfall of millions of dollars that will jeopardize employee pay raises, the cleanup of the Dixie Caverns landfill, building renovations and the purchase of school buses.
"We could be in dire straits," Supervisor Dick Robers said. "It gives everybody notice that we have to be very conservative this year."
Hodge's projection is a worst-case scenario. It assumes a $1.13 real estate tax rate, a 5 percent increase in the assessed value of real estate and no increase - but no further cuts, at least - in state funding.
That would give the county $2.4 million in "new" money in 1992-1993, compared with $3 million in 1991-1992 and $4.5 million this year.
But Hodge has identified $9.6 million in new funding needs for 1992-1993.
"It's a realistic, but slightly conservative, view," he said. "Of course, I'm very concerned. But as we always have in the past, we'll work through these issues, too. This is not impossible. I do not see panic."
County employees won't get a raise next year, so Hodge's spending projection includes a 5 percent raise in 1992-1993. That would cost $850,000 for government employees and $2.75 million for school employees.
The supervisors might ask voters to approve a $15 million bond issue this fall, so Hodge's projection includes a $1.8 million increase in debt repayment.
Also included is $750,000 for cleanup of the Dixie Caverns landfill, $320,000 for the purchase of 10 school buses, $500,000 for building renovations, $500,000 to match road construction money from the Virginia Department of Transportation and $318,500 to expand the county's recycling program.
Most of those expenses could, of course, be deferred - but not pay raises, most of the supervisors say.
Instead of putting off raises again in 1992-1993, it is more likely the supervisors will tell Hodge to leave job vacancies unfilled and use the money that saves for raises.
"Given another year like this, we'll start eliminating positions by attrition . . . and eliminating some services," Supervisor Bob Johnson said.
Supervisors also might consider raising the real estate rate, which they just lowered from $1.15 to $1.13. That reduction cost the county $570,000 in revenue in the upcoming year.
Supervisor Steve McGraw argued against lowering the tax rate - which will save the owner of an $80,000 house only $16 - and so did Hodge.
But McGraw is giving up his seat on the board at the end of this year. And Hodge says now that it might be better to keep the rate at $1.13 than to raise it back to $1.15 after only a year.
Increases in other tax rates could bring in additional revenue. The supervisors might consider raising the newly passed admissions tax from 5 percent to 10 percent, which would bring in $50,000.
Each 1-cent increase in the personal property tax rate would bring in $36,000.
And raising the utility tax on electric, gas and telephone bills from 6 percent to 12 percent - and adding the tax to water bills - would bring in $1.8 million. But the supervisors have said they want to hold off on an increase in the utility tax until it is needed to pay for the Spring Hollow Reservoir.
If money becomes as tight as Hodge fears, the supervisors might dig into the county's $4.3 million unappropriated balance.
Hodge says it's important to keep a large unappropriated balance to reduce short-term borrowing between tax collections and to help improve the county's bond rating. But even he admits now that it might be necessary to use some of that money in 1992-1993 for one-time capital expenses.
The supervisors will have another work session Tuesday on the budget for the 1991-1992 fiscal year, which begins July 1. About all that is left for Hodge and his finance staff to do - unless there are additional, unexpected cuts in state funding - is answer the supervisors' questions about line items in the budget.
And start worrying about the following year.
by CNB