County finds more money for DPS, holds tax-rate increase to 3 cents
County Commissioners agreed Wednesday to a fiscal 2013-14 budget that requires a three-cent increase in the county’s property tax rate to cover rising debt payments.
The tax increase is in line with County Manager Mike Ruffin’s initial request last month, despite the addition of $2.4 million more in funding for the Durham Public Schools than the manager had initially recommended.
Ruffin said administrators were able to cobble together the additional funding from a variety of sources, including a larger-than-expected contribution from county Alcoholic Beverage Control Stores that added $500,000 to projected revenues.
The additional subsidy for DPS was about half of what the school board requested from the county, but was in line with what Superintendent Eric Becoats initially advised the board’s members to seek.
“While this is not what the school board came to us and asked us for, we are trying our best to meet them as much as possible where they need to be,” said Commissioner Michael Page, a former school board member.
Page and Commissioner Wendy Jacobs also said they want the school board to feel free to ask the county for a mid-year supplement if public schools fare poorly in the N.C. General Assembly’s continuing deliberations about the state budget.
“The big thing I wanted to be sure of was that the progress we’re currently making in our schools will not be deterred,” added Commissioner Ellen Reckhow.
Ruffin had initially recommended “flat funding” for DPS, a request system leaders reckon would translate into a continuation of the $108.7 million in local subsidy the schools received from the county in fiscal 2012-13.
School officials contended they needed additional funds to cover, among other things, enrollment growth that’s largely projected to occur in Durham’s charter-school population. DPS by law has to share its local subsidy with charter schools.
Ruffin said the system is free to draw down its savings to cover the gap between the $2.4 million the county is offering in additional subsidy and the $4.9 million the school board wanted.
If it does, the combined effect of that draw and recommendations from Becoats would take a roughly $9.5 million fund balance down to about $6 million, the target DPS officials have indicated they want to maintain, Ruffin said.
He called the final decision on school funding by commissioners “a good middle ground.”
The county will be spending down its own savings, tapping it to pay cash for nearly $2.9 million in vehicle and equipment purchases administrators had planned finance with borrowed money.
The county has a reserve in the bank equivalent to nearly 31 percent of its general-fund expenditures. The vehicle and equipment purchase will put a dent in that, as could spending associated with a recent closed-door commissioners meeting, Ruffin said.
He didn’t specify what the closed-door meeting involved, but has said previously the county’s been holding money against the day it might have to pay IBM $9.9 million in tax refunds to resolve a dispute over the valuation of an IBM subsidiary’s computer equipment.
If all the potential spending hits, the county’s savings would drop to about 28 percent of appropriations, still well above the 25-percent savings rate its fiscal policy targets. “We’re still in very good shape,” Ruffin said.
The tax increase is the only one the majority of taxpayers will experience in fiscal 2013-14 as a result of local-government decisions. The City Council decided late last week to hold the line on its tax rate.
The county’s decision will cost the owner of a $150,000 house an additional $45. The combined city and county tax burden is rising 2.3 percent, ahead of the prevailing 1.1 percent rate of inflation.
Commissioners will ratify the county budget June 24.