Deal Saver - brought to you by the Charlotte Observer

0 comments
  • Print
  • Order Reprints
  • Share Share

Slow-growing economy will make county budgeting a challenge

As Mecklenburg County commissioners prepare to establish priorities for the fiscal year 2014 budget, they were loaded down Thursday with a buffet of competing economic forces.

On day 2 of a three-day planning conference, the board heard from two economists that jobs were returning to the county, but not the high-paying jobs that propelled Mecklenburg’s economy before the recession.

Overall, wages are down – by 15 percent since early 2008, the start of the recession, said UNC Charlotte economist John Connaughton.

“We’re creating jobs, but we’re creating income,” Connaughton told commissioners.

From Wells Fargo Bank economist Michael Brown, they heard that Charlotte’s housing prices have climbed about 7 percent over last year and home construction is on the rise.

Yet consumers aren’t spending the way they did before the recession.

“They’re still struggling to find reasons to be confident,” Brown said. “The economy is growing, but it’s still fragile.”

From Hyong Yi, the county’s budget director, they learned that sales tax revenues are up by 5 percent, but property tax revenue is down. County expenses, Yi said, are outpacing revenues.

Commissioners will have to consider these, and many other factors, when they give County Manager Harry Jones and his staff direction for creating a new budget. The board spent Thursday getting a lesson on how the county is performing and how a budget is developed.

Friday, they’ll set priorities.

“We’ve tried to provide the board a context for their decision making,” Yi said. “Their challenge will be difficult to balance the need for revenue to provide services and being mindful that we want to keep the tax rate as low as possible.”

Board Chair Pat Cotham said creating a new budget and tax rate “will take tough decisions.”

“We have to be mindful that families have less money and are carrying a lot of financial burdens,” Cotham said. “We also need to figure how we can cut expenses. It’s easier to lead when times are good.”

Commissioners Karen Bentley and Bill James, both board veterans, said they’d like to see the board set a tax rate – or at least discuss one – early on and direct Jones to build a budget around that.

“That way the county manager and groups that get money like (Charlotte-Mecklenburg Schools) … will know where our thinking is on what we desire as a tax rate,” said Bentley.

She’d like to see the tax rate cut by another penny. Last year, commissioners cut taxes by 2.44 cents, to the lowest rate in eight years.

“I don’t think we lowered it enough to begin with,” Bentley said. “We need a tax cut to help balance out the increase in the check that people are writing in property taxes.”

She said the board’s priorities will require “a dual discussion.”

“Because wages are down and unemployment is still too high, you have the whole dynamic of providing safety net services, which is an expense” Bentley said. “But you also have the tax burden that property owners have to assume when their income is down.”

Jones and other commissioners say it’s too early to determine a tax rate.

“I’d prefer to live with the growth revenue from the existing tax rate,” said Commissioner Dumont Clarke. “I’d certainly consider a reduction in the existing rate. But I’ve heard things today that I think would make that very challenging.”

Perlmutt: 704-358-5061

Hide Comments

This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.   Read more

Quick Job Search
Salary Databases
Your 2 Cents
Share your opinion with our Partners
Learn More