Wednesday, March 25, 2009

It's going to be a tough budget cycle

Last night, Orange County Commissioners met in a work session in which they discussed several scenarios for forming a budget for the coming fiscal year. Of the four scenarios discussed, the outcome for the county (and thus money for schools and other public services) was not sunny — the county could come up anywhere between $8.7 million and $16.7 million short of last year's $183 million revenue.

Commissioners also sought to clarify a point that they felt had not been fully relayed to the public — the county is seeking a property tax rate that will generate no more revenue than it did last year. That is revenue-neutral, in it's definition, they said, but it is not tax-neutral. Taxpayers will likely see their property taxes go up.

The reason this would still be revenue-neutral is that other taxes collected — such as on motor vehicles and sales tax — are projected to be down significantly. This is because people are spending less — the example was that if they got X revenue from tax on a new car or updated infrastructure from a major company, that money isn't coming in this year because purchases are being delayed.

Now, one of the four scenarios (which are not their only options) assumed that revaluations would go through and the county would "hold harmless" taxpayers whose properties increased by 24 percent or less. That would be more than 54 percent of taxable properties; it would lose the county $16.7 million in revenue compared to last year.

The final decision was to pursue a revenue-neutral ad valorem tax rate, and to potentially cut from there to meet the budget goal. That rev-neutral would be somewhere between 84 and 87 cents per $100 valuation, a drop of 13 to 16 cents from this year's 99.8 cents.

We'll have an article next week detailing their discussion and with more information about whose valuations have gone up by how much. Two-hundred and forty-two properties increased by more than 100 percent; commissioners said that those people should be encouraged to appeal if they have not already. That 242 figure should be put in perspective, though —that's .09 percent of total taxable properties, of which there are more than 51,000.

Look for more next week.

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