After failing to adopt the 2023-24 fiscal year budget on June 13 as originally scheduled, the Macon County Board of Commissioners met again Monday night and after two hours and little to no change to the budget that was voted down less than a week prior, commissioners adopted a budget.
At $63,754,537, the budget approved on Monday night is nearly identical to the budget County Manager Derek Roland originally proposed in May — $64,566,978 — with revenues and expenditures balanced at a revenue-neutral tax rate of 27 cents per $100 of assessed property valuation, giving Macon County the lowest property tax rate in the State of North Carolina. Although the county’s property tax will be decreased by .13 cents — the overall county budget will jump more than $5 million — with the increase being directly attributed to an increase in revenues collected by the county.
There were a few minor changes to the budget made at the request of Commissioner John Shearl. Those adjustments included removing the budgeted allocation for improvements for the Highlands School soccer field — an $800,000 price tag. While the project wasn’t funded in the budget, commissioners were clear they intend to continue to move forward with the renovations, however, they did not see the need to carry the funding for the project in the fiscal year budget since soil samples were not expected to be completed until April. Without soil samples, the county does not have a clear plan for the needed improvements. Chairman Paul Higdon reiterated that removing the funding was just temporary and once soil samples are completed, county leadership will continue working with the Board of Education on a plan to address the soccer field.
The budget was also amended to include funding to repair the building located at Zachary Park in Highlands as well as some grading and work on the adjacent parking lot and field in hopes of making the area usable for county youth recreation.
The most notable addition to the budget for many was the county’s decision to reinstate funding to complete the architectural design work for the Highlands School expansion project that would improve the school’s media center and make it possible for the school to open services for preschool classrooms. The funding is needed to replace funding that was cut by commissioners just a few months ago and will get the project “shovel-ready” with design plans for if and when additional funds are earmarked for the actual renovation project itself.
At the request of Commissioner Shearl, one full-time position within the county’s animal control division will be eliminated. The budget did not include any additional funding for a position within animal control, but it did request using funding currently budgeted for an administrative position be reallocated to be used for a control officer to better serve Macon County. The funding reallocation was requested to address several comments and concerns from the community regarding animal control, many of which commissioners hears last week during public comment. However, Commissioner Shearl requested not only for the funding not to be reallocated for a new animal control officer position, but to be eliminated entirely. Along with the elimination of the position, additional funding was removed from the budget that would have provided a vehicle for the position.
Monday night’s budget was a compromise budget that included the additions Shearl requested above, while also not including other items he wanted to see removed from the budget.
Commissioner Shearl originally made a motion to drop the county’s tax rate to .26 cents per $100 of assessed value, make the 3% COLA (cost of living adjustment) and 1.5% step increase a one-time allocation, and remove funding for the health department to replace the Molar Roller — a mobile child dental operation. Commissioner Shearl also requested that all fee increases for commercial waste disposal requested by the county’s solid waste department be denied. Although Commissioner Danny Antoine originally seconded Shearl’s motion and budget proposal, after seeking clarification and further discussion by the board, Commissioner Antoine ultimately voted to reject Shearl’s proposal.
The final budget included a vote to adopt by Commission Chairman Paul Higdon, marking only the third budget Commissioner Higdon has supported since being elected to the board in 2012.
Commissioner Shearl explained his dissenting vote by saying he remained steadfast in his belief that the taxpayers of Macon County deserved to see a tax decrease — even more so than the tax decrease nearly half of the county will be seeing with the .27 tax rate that was being proposed. Factoring the reevaluation and the county’s new tax rate of .27 cents, close to half of citizens in Macon County will be seeing a decrease on their tax bill, however, the amounts will vary. For example, according to tax records, Commissioner Shearl owns nine properties in Macon County. Although the taxes on his home address will increase by $92.64 per year based on his property value increasing by $188,340 — two of his other properties that saw a smaller increase in value — between $5,000 and $25,000— will actually see a decrease in taxes of $270.45 and $278.44 per year respectively. When all nine of Commissioner Shearl’s properties are factored together, despite seeing the value of his combined properties increasing by $430,880, he will actually pay $619.99 less in taxes.
While Shearl explained he voted against the budget because he wanted to see additional tax breaks for citizens, the .26 tax rate Shearl proposed Monday night — or even the .24 tax rate Shearl mentioned last week would still have some county residents seeing an increase on their tax bill due to the revaluation and their property values increasing. In fact, the county’s ad valorem tax would have to be reduced to .20 cents per $100 of assessed value — or half of the current tax rate — before no properties in the county would be able to report not having a higher tax bill this coming year.
County Manager Derek Roland and County Finance Director Lori Hall stressed the importance of not funding recurring operating costs through revenue sources such as sales tax due to the unpredictiablility associated with them. Although the county is reporting an increase in sales tax revenue this year, that could change next year and without the realibility of ad valorem taxes, the county’s availble funds for operations and services could be adversly impacted.
The final budget came down to negotiations surrounding funding the replacement of the county’s Molar Roller unit.
The Molar Roller unit provides dental care to approximately 20% of students at each school in Macon County, focusing primarily on Medicaid recipients and uninsured. On average, the “Molar Roller” provides services to 17 students per school day during the school year.
While commmissioners debated whether or not to fund the Molar Roller Unit, the funding that was identified to replace the unit was not from a county revenue source. The Molar Roller replacement was funded as part of the FY 24’ budget’s capital expenditures, which accounted for $5,932,397, an increase of $1,771,525 over the FY 23’ Original Budget. Revenue to offset the increase in capital expenditures comes from a combination of increased grant funding, increased Medicaid Cost Settlement funding and a substantial increase in interest earnings on investments revenue. $2,595,409 in FY 24’ capital expenditures is representative of County “Pay‐Go” capital. “Pay‐Go” is short for pay‐as‐you‐go. These capital expenditures occur on an annual basis, within the organization and typically involve major equipment or software purchases, vehicle replacement and small construction or renovation projects. $411,370 of the $2,595,409 in county funded pay‐as‐you‐go expenditures will leverage an additional $1,198,330 in grant revenue and Medicaid Cost Settlement funding. Using this revenue, the county’s budget will pay for several capital projects within the county inlcuding replacing the Molar Roller Unit in Public Health. Of the estimated $869,983 Replacement cost associated for the Molar Roller, $566,378 will be offset by Medicaid Reimbursement increase
Despite the replacement being funded through Medicaid Cost Settlement funds, Commissioner Paul Higdon and John Shearl made their case for holding off on the replacement. Both commissioners suggested rather than inlcuding he Molar Roller in the budget and funded through grant revenue, the project could be delayed to allow for more information to be gathered. Then, if additional information were to determine a replacement was needed, the county would just fund the replacement through the county’s fund balance instead. Ultimatley, Commissioners Danny Antoine, Gary Shields, and Josh Young pushed for the Molar Roller Unit funding to be inlcuded this year.
The meeting was near capacity with the bulk of the audience being comprised of county employees. With Chairman Higdon and Commissioiner Shearl speaking out against the 3.5% COLA and 1.5% step increase the week prior, with Commissioner Higdon suggesting a smaller increase of 2% instead, employees attended the meeting to advoate for their wages. Commisiosner Higdon, who spent 10 years of his career working for the county, said that he left his county job in environmental services because the pay was not enough for him — to which county employees in the audience responded and asked if Higdon was suggesting that they all quit their jobs. Another member of the audience asked the board if any of the commissioners increased their business prices or operational costs in recent years — while suggesting the county not do the same thing. Commissioner Shearl responded that he had not given himself a salary increase in several years for his privatly owned business. When asked for clarification to his question, the audience member said he was not referring to salaries, but rather just the cost of doing business in general since as comissioners they kept comparing the public sector to the private sector. According to public records with the town of Highlands — Commisiosner Shearl increased the fees for his landscaping contract with the town of Highlands by 8.3 percent from 2021 to 2022.
The budget approved on Monday night will go into effect on July 1, 2023.