By: Michael Campbell | Twitter: @itsthesoup
Posted: Mar. 7, 2018 | 3:35 p.m.
PRINCE GEORGE – In the face of near-flat revenues and a request to build new elementary schools in the county, County Administrator Percy Ashcraft’s proposed budget features a five-cent real estate tax increase to help pay for the construction of one of those schools.
During his nearly hour-long report to the Prince George Board of Supervisors and members of the public gathered in the audience following along during his presentation on the projector, Ashcraft showed his $116 million proposed budget for the 2019 financial year, an increase of just over two percent when compared to last year, and walked through the financial situation the county is facing as, particularly on the revenue side and the challenge that creates when paying for multi-million dollar capital projects and rising costs in other areas.
According to his proposed budget, Ashcraft and the county’s financial team projects General Fund revenue will come in around $56 million in the coming fiscal year, just about $2.4 million more than in FY2018 but, while an increase is expected, a key revenue source – real estate tax revenue – is only expected to grow by $386,000.
Along with “modest” increases in real estate tax revenue, Ashcraft’s budget estimates a $74,000 increase in personal property taxes due “an increase in book values and proration that was adopted by the Board of Supervisors in 2014,” but much of that increase “is diminished by the impending closure of Ace Hardware and [an] expected loss of Business Furniture and Fixture tax revenue.”
As a result of a relatively flat revenue year on the way for Prince George County, Ashcraft’s budget calls for a five-cent increase to the county’s real estate tax rate, which, if approved, would raise the county’s rate from 86 cents to 91 cents per $100 of assessed value, which would keep Prince George roughly in the middle of the road among surrounding localities, with the lowest real estate tax rate being in Sussex County at 58 cents, the highest county real estate tax being levied in Chesterfield County at 96 cents and the highest real estate tax among cities being in Petersburg at $1.35.
That five cents, which equates to $1.25 million, would be dedicated specifically to “capital construction” to cover the costs of building a new elementary school in the county to replace one of two aging buildings in Walton and Beazley Elementary Schools. As part of the budget process, the county and the Prince George School Board have already expressed interest in modifying their joint revenue-sharing document known as the Memorandum of Understanding, or MOU which dictates what percentage of five revenue sources the school system would receive as part of its annual funding from the county.
In order to ensure adequate financing is available for the construction of the school, it has been proposed that the MOU be modified to reflect that revenue generated from tax increases would be exempt from the MOU’s sharing provisions if that the proceeds from that increase are being used for school-related capital projects, such as building a new school building.
Both the county and school division are in the early stages of discussing such MOU modifications, which would have to be approved by both boards.
Currently in Ashcraft’s budget, the school division is proposed to receive roughly $16.4 million in funding thanks to the MOU, up roughly nearly two percent over last year’s local funding.
While revenue was a main point of conversation for Ashcraft, how that revenue was being used took more time as he walked through the $56 million in general fund expenditures expected in the coming fiscal year as part of his proposed balanced budget.
That $56 million total in general fund expenditures represents a roughly four-and-a-half percent increase over the last fiscal year, with the county’s debt reserve fund for capital projects making up roughly $1.25 million of the increase. The main hallmarks of the county’s proposed spending for the upcoming year feature around a lack of new positions being added to the county, the implementation of a soon-to-be-completed salary study, and an increase in health insurance costs for the county.
In Ashcraft’s budget, while no new positions are funded or proposed in the county, there is only an increase in hours for the county attorney’s office for a part-time attorney. Speaking in regards to the salary study, Ashcraft noted that the county is awaiting results of the study, expected later this spring and has earmarked $200,000 toward the implementation of the study to help get staff in proper pay grades when compared to peers in other communities in the same field.
In regards to healthcare, Ashcraft said the county is anticipating a 16 percent increase in employee health insurance costs, noting that it remains to be seen if the county will share the same health care provider or part ways and have separate providers. Within his budget, an additional $226,005 is proposed to cover claims and the county’s special revenue and utility fund budgets were increased by $33,665 due to increased claims.
Ashcraft’s budget calls for a 4.3 percent increase to the county’s fire and EMS budget of $2.8 million, while the county police department remains relatively flat at $5.3 million for the upcoming year, while $400,000 has been proposed through debt proceeds to help continue the police vehicle replacement program, which would be in its fourth year out of five as of next financial year.
While a new elementary school takes up a large chunk of the county’s debt-funded capital improvement projects at $29.1 million, the county has over $7.5 million in other projects that will be funded through borrowing, including water main extensions along Route 156, upgrades to the Food Lion Distribution Center water system, self-contained breathing apparatus units for emergency services, a new concession stand for Scott Park and various security improvements, among others.
There is also a proposal to have a new playground installed at the Burrowsville Community Center within Ashcraft’s budget at a cost of $29,229.
In addition, after the discussion earlier in the year about who should pay for maintenance at The Gardens at Exit 45 beautification project, within Ashcraft’s budget, $10,000 of the county’s tourism fund revenue has been earmarked for “maintenance of improvements” at Exit 45. Tourism fund revenues are generated by the local lodging tax charged to those staying at hotels in the county and, of the five percent tax, two percent goes in the county’s general fund while the remaining three percent is transferred to the county’s tourism fund, which can only be used for items related to promoting tourism activity in the county.
Ashcraft’s budget is now in the hands of supervisors who will continue to fine-tune the budget through a series of work sessions, the first of which being scheduled for March 7 in the county board room at 6 p.m. All work sessions are open to the public. Supervisors are expected to make a decision on the tax rate that will be advertised for a public hearing at that meeting.
Once supervisors select a tax rate and it goes out for advertisement to the public, it cannot be raised higher than the advertised amount but it can be lowered.
The county has until June 30 to officially adopt their FY2019 budget.