Haywood schools may be cut as sales tax collection drops

Archived News

Haywood schools may be cut as sales tax collection drops

In Haywood County, the tax rate would have to bump up three cents for the county to bring in the same amount of money as last year.

Overall, the property values in the county were down following the recent revaluation, the first countywide appraisal in five years. To offset the slightly smaller tax base, the county would have to raise the tax rate from 51 to 54 cents.

County Manager Marty Stamey presented the budget to county commissioners at their meeting Monday, where he painted a picture of fiscal austerity.

“We’ve got less people working than in ‘05 and we’re doing the same amount of work, in some cases we’re doing more work,” said Stamey. “This is the new norm, doing more with less.”

Here’s what the new tax rate would mean based on how your property performed in the revaluation:

• For residents whose property values dropped by at least 5 percent, tax bills will be less.

Related Items

• Those whose values were perfectly stagnant will see around a 5 percent increase. So for a home valued at $100,000 — both in 2006 and this year — the bill will go up by $27.

• Properties that increased in value will also see a hike in their tax bill by about the same percentage.

Throughout the budget process, commissioners have said they’re committed to a neutral tax rate.

“I think that’s fair because the county’s taking in the same amount of money if they’d not done a reval,” said Commissioner Kevin Ensley. “I don’t know any other way to do it, except keep [the rate] the same, and then we’d have to make a lot more cuts than we have now.”

“We’ve made cuts the last three years and it’s bare bone,” said Commissioner Bill Upton.

While the property tax side of the budget will remain constant, wilting sales revenues mean the county will still have to make some cuts. Most notably, education — both Haywood County Schools and Haywood Community College — will be slashed 3-percent.

Sales tax is the county’s other main money spinner — it accounts for 15 percent of revenue — and it’s down 3 percent over last year. Thus the cuts to schools, which claim a large share of the county’s budget — about 25 percent of the county’s entire budget goes to education.

While a 3-percent cut may sound small, it is indeed a hit, given that the school system asked the county for an increase on what they were given last year. Instead, they’re now losing $430,000.

Stamey said he realized the schools’ need and asked them to dip into their fund balance to cover their losses from state and local defunding.

“These are difficult decisions, ones that we don’t like to make, but we have to do it to keep a revenue neutral budget,” said Stamey.

For the schools to get that money back, commissioners would need to tack another two thirds of a penny onto the property tax rate.

Commissioners will hold a public hearing on the proposed budget at 5:30 p.m. on Tuesday, May 31, with a vote scheduled for their regular meeting at 5:30 p.m. on Monday, June 6.

Haywood County’s tax rate versus tax base

Tax base before revaluation: $7.258 billion

Tax base after revaluation: $7.086 billion

2010 tax rate: 51.4 cents

2011 tax rate: 54.13 cents

What is revenue neutral?

A revenue-neutral tax rate means the county will bring in the same amount of revenue despite changing property values. Usually, property values increase so the tax rate can come down. But property values on average went down slightly in the recent countywide revaluation. The tax rate will go up to compensate for the smaller tax base.

The official revenue-neutral tax rate allows for a minor increase from newly built homes and buildings that are added to the tax base year to year.

Tags: