A couple of proposed tax increases were discussed by members of the Lincoln County Board of Commissioners during a budget work session Wednesday evening.
County Manager George Wood’s 2012-2013 budget currently calls for a hike in the East Lincoln Water and Sewer District tax rate from 1.99 cents to 3.55 cents and increases for both the Union Fire District and the East Lincoln Fire District tax rates.
East Lincoln Water and Sewer District
In his budget message to commissioners, Wood said of the planned ELWS District tax increase, “This is necessary as the fund balance that had accumulated has been spent down over the last four years to give tax relief to these citizens.”
“That fund balance has been used, and the tax rate must generate sufficient revenues to offset the remaining debt service,” he continued.
According to projections, the rate would gradually decrease over the next five years, with the debt scheduled to be fully repaid by the end of fiscal year 2017. At that time, the ELWS District would be dissolved, and the tax rate would no longer be imposed on properties within the district.
Wood emphasized that the goal was to tax the properties only enough to pay off the debt on schedule. Additionally, he said the debt repayment couldn’t be extended to prevent the tax increase due to the bonds expiring.
Commissioner Carrol Mitchem questioned whether money could be taken out of the Water and Sewer Fund to offset the tax hike, but Wood said that would result in the rest of the county essentially subsidizing the district.
The Water and Sewer Fund, which Wood noted is in “good shape,” has built up a healthy fund balance that will allow the county to pay cash for major projects and improvements rather than doing a bond issue.
As such, Wood told Mitchem that transferring some of those funds and placing them in the ELWS District Fund would cause the county to have to then borrow money for those planned projects.
Commissioners also discussed a proposed 9-cent tax rate for the Union Fire District, up from 7.5 cents. The reason for the increase is the department’s plans to replace its existing station, which was built in 1964 and is unable to accommodate modern fire equipment.
The increased taxes, along with existing funds, would be used to hire an architect for the project.
“Nobody likes a tax increase,” Chairman Alex Patton said, but he added that people in the district would want the best equipment available if their houses were on fire.
The East Lincoln Volunteer Fire Department is also requesting a tax increase from 6.8 cents to 7.85 cents to cover its projected expenses.
During discussions on the Fire Districts Fund, commissioner Carl Robinson said he had been receiving a lot of questions from citizens who perceive the amount of funding used by fire departments to be wasteful.
He also stressed that he would like to see the funds being spent in the same manner across the various districts and for the stations to more clearly demonstrate and justify how their funding was being allocated.
Robinson and commissioner Jim Klein volunteered to meet with the two departments requesting the tax increases to go over their budgets in more detail.
Despite these increases, Wood’s budget currently calls for the property tax rate of 59.8 cents to remain the same, though Robinson, Mitchem and commissioner George Arena noted that they would love to see that rate cut. Robinson said he would like to meet with Wood to comb through the budget to determine if that would be feasible.
A public hearing on the proposed budget is scheduled for the board’s June 4 meeting.