This article was published in the Lenoir News-Topic.
LENOIR — The Lenoir City Council began wrestling Friday with a budget for fiscal year 2013-14 that will have less revenue and new expenses, plus the prospect of state tax reforms that could further cut into revenue.
“Unless the state wrecks our budget with some stuff they’re going to do, I think we’re going to be OK,” City Manager Lane Bailey said. “It’s not going to be a fun year, but we’re going to get through it.”
Tax reform was a campaign talking point in 2012, and it appears likely Gov. Pat McCrory’s brand of it could reduce revenue at the local level.
Even if that doesn’t happen, the city is facing a combined $766,000 in new expenses and lost revenue.
The lion’s share of lost funding, $648,900, comes from the state ending a program that compensated local governments each year for revenue lost by the 1988 repeal of the inventory tax.
The city also expects a 3.3 percent increase in costs for its employees’ medical insurance, an increase in what it pays for state unemployment insurance, and an increase in its share of the stormwater program. Those costs total nearly $120,000.
And tax revenue collections overall remain sluggish. Income from sales and property taxes is virtually flat, Assistant City Manager Danny Gilbert said.
The city is budgeting for no increase in property tax revenue. Appeals of new property appraisals could theoretically result in a reduction, but it’s more likely that the number will stay at zero.
Layoffs are not expected, Bailey said, but the city may leave jobs vacant when people retire or leave for other jobs.
“We have no plans to lay anybody off,” he said. “If you’ve got a job and you’re doing a good job, this year and in the years to come you’ve still got a job. But in the next year and the year after, the organizations are going to be smaller.”
There is no plan for a property tax increase for city residents this year. City officials are tentatively projecting increases for the 2014-15, 2015-16, 2016-17 and 2017-18 budget years.
People will likely pay more for recreation in the city, however. The Parks and Recreation Department has asked for membership rate increases at the Lenoir Aquatic and Fitness Center, effective July 1. A family summer pass, for example, would increase from $85 to $100 for a city resident. A non-resident would pay $150 instead of $115.
Those rates still lag behind those at facilities in Morganton, Valdese, Shelby and other nearby areas.
Bailey will formally present the proposed 2013-14 budget to the city council May 7.
A copy will be available for the public within five business days. Budget work sessions will follow May 13 and, if necessary, May 20, 23 and 28.
The earliest possible date the budget could be adopted is June 4, at the city council’s 6 p.m. meeting in the City-County Chambers.
A public hearing on the proposed budget will be held that night.
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