County to cut tax rates for third straight year
A property-value boom and deficit spending drive the cuts
February 28, 2013
The Carroll County Board of Supervisors will continue its aggressive tax-rate cuts in the next fiscal year to reduce the amount of money it holds in reserve, according to a budget proposal expected to be approved next month.
The new budget will be the third straight in which county leaders plan to spend more than what they receive in taxes and other revenues. It includes deficit spending of about $1.5 million. The total budget is about $17.6 million, and the county will have enough cash on-hand to pay about half that amount, which supervisors have said is excessive.
Tax rates will drop 17 and 5 percent for city and rural residents, respectively, to $3.77 and $7.11 per $1,000 of taxable value if the supervisors approve the new budget on March 11. A public hearing on the budget is set for 10 a.m. that day at the Carroll County Courthouse.
Under the plan, a city resident who owns a $125,000 house will pay about $40 less for county property taxes next year compared with this year, said Joan Schettler, the county auditor. Someone who owns a 40-acre tract of land would pay about $1 less.
The total cuts to the tax rates since 2011 would be 37 and 23 percent for city and rural residents. Residents also pay property taxes to cities and school districts.
But the county rate cuts so far have been neutered by a boom in the county's total taxable property valuation, which jumped 10 percent in the past year to about $1.2 billion. The valuations have been buoyed by the county's two wind farms - the clusters of turbines northwest of Carroll that generate electricity from wind.
"Our valuations increase this year was far better than what we expected," said Mark Beardmore, the supervisors' chairman.
The board had hoped to cut $2.4 million in the past year from its reserves - which totaled $9.7 million in June 2012 - but the actual reduction is estimated to be about half of that by June 2013 because of the uptick in property value.
Beardmore said the substantial revenue gains from increased property value will plateau in 2016 when a special tax district for one of the wind farms expires. He said the deficit spending will continue indefinitely until county leaders slash the reserves to an unspecified amount. Counties, cities and public schools often strive to have between 25 and 35 percent of their total budget in reserve. Carroll's percentage is estimated to be about 40 by June 2014.
County leaders want to cut mental-health reserves, in particular, in light of new requirements that state lawmakers approved last year. The changes are meant to encourage counties - which by law must provide mental-health services to indigent residents - to join other counties to offer the services.
If Carroll joins one or more counties, it's possible that its reserve funds that total more than $2 million will be shared with the other counties.
The new budget, which will take effect July 1, includes modest spending increases that total about $600,000 - a 3-percent increase from the current budget. Yet it's a slightly smaller budget than the last fiscal year.
Beardmore said the county's health-insurance costs have risen 29 percent in the past year.
"The challenge that lies ahead of us is to find some ways to drive those costs down," he said.
The county will also pay more for workers compensation insurance due to two large claims from a 2010 ambulance crash that critically injured two paramedics, Schettler said.
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