Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 6, 1991 TAG: 9104060489
SECTION: VIRGINIA PAGE: A-3 EDITION: BEDFORD/FRANKLIN
SOURCE: DAVID M. POOLE STAFF WRITER
DATELINE: ROCKY MOUNT LENGTH: Medium
No public record of the closed-door meetings has been released.
But when Huff presented his budget recommendations four days later, it became clear that supervisors wanted to avoid an election-year tax increase.
The proposed spending plan would balance the budget by raiding $715,000 from the county's estimated $3 million emergency reserve.
If the budget is adopted, it would be the second year in a row the Board of Supervisors has dipped into the reserve fund to avoid raising taxes.
Last year, Huff warned board members that continued raids on the reserve would result in "major fiscal problems."
The reserve fund is important because it keeps the county in the black when tax collections are slow and provides security in the event of major, unforeseen expenses.
Huff has revised his doom-and-gloom forecast, saying the county can get away with depleting the fund again this year.
Supervisors say there are several valid arguments against a tax increase this year.
The recession has ripped through Franklin County's textile and furniture industries. Unemployment topped 12 percent in February. Supervisors say the last thing that residents who have been laid off need is higher taxes on their houses and vehicles.
Some supervisors say the tax burden should not go up - even in good times - if the county has money sitting in the bank beyond what is necessary for cash-flow purposes. The county could borrow money if it is hit with a catastrophic expense, some say.
None of the supervisors says politics factored into the budget choices, even though all seven seats on the board will be on the November ballot.
Elected in 1987, board members raised property taxes for most county residents in their first two years in office. Blackwater Supervisor Wayne Angell wondered aloud about the possibility the board would go down in history as having increased taxes in all four years of its term.
That seemed a real possibility. County government was growing rapidly to meet demands for land-use controls and improved fire and rescue protection. State mandates vastly expanded local commitment to education and trash disposal.
The tax-increase streak ended last year, even though expenditures exceeded revenues by $700,000 in the 1990-91 spending plan. The board made up the difference by dipping into the $3.1 million budget reserve.
Preliminary plans call for another $715,000 raid - $500,000 will be set aside for future landfill costs, $115,000 will go into the capital budget and $100,000 will be retained for land tax reassessment.
The board could cut deeper into the reserve fund if it helps the School Board cope with state budget cuts or if replacing Recreation Park land exceeds a $250,000 estimate.
Huff said the reserve fund balance will come out of the coming fiscal year, which ends June 30, 1992, with a balance well above the $1.5 million minimum needed for cash flow.
One problem, though, is that no one knows exactly how much will be left.
The fund stood at $3.4 million on June 30, 1990, but that was before $700,000 was appropriated for the current budget.
Huff estimated the balance will stand at about $2.9 million on June 30 and about $2.4 million on June 30, 1992.
Huff said that is as close as the county can afford to cut it.
"This virtually assures there will be a tax increase next year," he said.
by CNB