A majority of Mecklenburg County commissioners appear to support a tax rate cut in the upcoming 2014-15 budget, but also want to restore or expand county services reduced during the recession.
The size of the rate cut will depend on the cost of increasing services, many commissioners agreed.
That was the prevailing thought on the tax rate conveyed to County Manager Dena Diorio on Friday, the last day of a two-day budget retreat. Diorio will use Friday’s conversation to help her build a budget that she’ll recommend May 20.
She has said a rate cut was a strong option because of unexpected revenues from property and sales taxes and the smaller-than-expected financial hit from refunds generated by the 2011 revaluation review. The county, she said, could have about $40 million in excess property tax revenues to use to cut the rate and expand services.
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“The message I got is that I’ve got flexibility to expand services as well as try to make some reduction to the tax rate,” she said. “It’s a good problem to have. It shows that fiscal discipline – if you stick with it – will certainly pay off.”
A rate cut would follow last year’s 2.35-cent tax hike, prompting board Chair Trevor Fuller to say he was concerned about the board “gyrating the tax rate up and down every year.”
Yet Fuller said he could support “cautiously reducing” the tax rate, but felt that restoring services lost in the recession was critically important.
“I don’t want the tax rate discussion to be the only part of the discussion,” he said. “I want it to include using some of the excess to increase services that the county provides, but more importantly to get back to where we were before the cuts.”
Commissioner George Dunlap, a Democrat, said a tax cut made sense. How large, he said, depended on the cost of services.
Dunlap said he didn’t want Charlotte-Mecklenburg Schools to suffer if the rate is cut. CMS relies on Mecklenburg for about a third of its operating budget.
“I think the board is unified about reducing the tax rate and expanding services,” Dunlap said. “The real difference is how you get there. But if we didn’t spend all the money that was proposed to be spent, it makes sense to say the community that we’ve been good stewards of your dollars and you ought to get some of it back.”
The board’s three Republicans advocated to return a larger chunk to taxpayers.
Republican commissioner Karen Bentley said Mecklenburg’s tax rate was driving some people to leave the county for counties with lower rates.
If Mecklenburg wants to remain competitive, she said, commissioners needed to eventually lower the current tax rate of 81.57 cents per $100 to the so-called “revenue neutral” rate set after 2011 revaluation. That rate, 78.83 cents per $100, let the county raise about the same amount of money as before the revaluation.
That would require a 2.74-cent reduction – which most of the board’s six Democrats likely wouldn’t support.
Fellow Republican Bill James said the board ought to at least reverse last year’s tax hike. “Obviously, we didn’t need to increase taxes last year because we have so much extra money now,” James said. “Why would you raise taxes and keep it when you don’t need it. You should give it back.”
Republican Matthew Ridenhour said the board could cut the rate by 2 cents and still have considerable money to spend on services. “We could upgrade technology and meet the needs of the community and offer a meaningful tax cut,” he said. “It’s a win for everyone in the community.”