The York County Board of Supervisors continued the budget process Tuesday with a work session that focused on contributions to the School Division and on other ways to generate revenue that could lessen the proposed 2.3 cent real estate tax increase.
The York School Board voted Monday to approve a $124.4 million budget, which included a request of $2.9 million in additional local funding from York County. When York County Administrator James McReynolds presented his proposed budget for 2014 at the March 19 Board of Supervisors meeting, he suggested a $2.3 million contribution to the School Division. The $2.9 million figure approved Monday is in line with the additional funding Superintendent Eric Williams requested when he presented his budget last month.
The $600,000 discrepancy is due to higher payroll taxes on mandatory employee contributions to the Virginia Retirement System. McReynolds said that because the county did not contribute that money to county employees, he could not recommend the county sign off on that money for the school division.
Last year, the Board of Supervisors decided to raise the salaries of county employees 5 percent to offset a required 5 percent contribution to VRS. Facing a tight budget, the school division opted to raise the salaries of its employees by 1 percent per year for five years, though the school board asked to use extra state funding to boost the salaries of its employees to the full 5 percent. Supervisors said no, citing a memorandum of understanding between the boards that said any extra funding from the state must be returned to the county, which saw a tax increase in part to pay for a higher school contribution.
In the budget approved Monday, the school division would give its employees the remaining 4 percent salary increase.
Supervisor Thomas Shepperd asked Tuesday about the financial implications of having the school division contribute 1 percent to the VRS per year instead of contributing the remaining 4 percent all at once with this budget. The 4 percent increase is included in the $2.3 million figure, so by switching back to the 1 percent plan, the county would be able to shed about half a penny off the proposed 2.3 cent increase.
During a discussion of the county’s revenue, McReynolds highlighted changes in revenue anticipated in his 2014 proposal. A $41,960 bump in permit and fees revenue is due mostly to a “considerable increase” in concealed weapons permits. A $16,660 addition to revenue from use of money and property comes from sales of advertising at the Sports Complex and from the Freight Shed, which is now solely operated by the county.
The biggest increase in revenue is from an additional $3.2 million in property tax, much of which would come from the proposed 2.3 cent increase.
Shepperd asked about other methods of generating revenue from the county, to which McReynolds explained that because Virginia is a Dillon Rule state — it cannot assess cigarette or amusement taxes — and because taxes like meals, sales and lodging are capped for counties by the state, there are two major sources left for the supervisors to consider other than a real estate tax increase: assessing a stormwater fee and a utility tax.
Virginia Code gives localities permission to assess stormwater fees to help support local stormwater management programs. The utility tax, also permissible under Virginia Code, would be another way for the county to generate revenue. Williamsburg, Gloucester County, Hampton, Poquoson and Newport News currently charge a utility tax.
Supervisor George Hrichak said he wanted to see the effects spelled out of not raising taxes.
“I’ve been getting a lot of feedback from citizens on tax increases,” Hrichak said. “A lot of these people have not had increases in salaries or are retired. The proposed tax increase is not going over very well. Utility and stormwater fees are not going to go over very well.”
The supervisors discussed how taxes collected from meals, retail sales and lodging are spent. Virginia code allows York County to collect a lodging tax of no more than 5 percent. Any money collected by York County over 2 percent on that tax must be devoted to tourism spending.
Supervisor Sheila Noll said the supervisors should consider using some of the 2 percent to help fund the county and offset the proposed tax increase. Chairman Walt Zaremba suggested a work session to explore the history of the meals/sales/lodging tax and to take a look at how changes in how that money is spent might affect the county. He cited the importance of tourism to the county.
“We can certainly revisit how we want to spend that money,” Zaremba said, “but the logic behind that decision years ago was to support an industry vital to York County.”
During a discussion of how the budget is available on the county’s website, Shepperd said the document was likely difficult for a layperson to understand and asked for an alternative that could help residents better understand the process.
“I have been in and out of the budget so many times it hurts my eyes,” Shepperd said. “Unless you are in and out of there almost daily, the budget is a nightmare. It’s really a nightmare. You have to leave bread crumbs all over the place to find your way and figure out stuff. There’s got to be a way the budget can be functionally usable by the public.”
Zaremba said the county consistently receives high marks for transparency. He also cited the difficulty in taking a new set of people each year and educating them in the intricacies of the budget document.
“The budget is like cave diving,” Shepperd replied. “You go down there, you’re in the dark. You let go of the string and you have no idea where you are.”
You can see the proposed budget for 2014 on the county’s website by clicking here. The supervisors will hold the next budget work session at 6 p.m. Tuesday at York Hall.
