HOW ARE YOUR TAX DOLLARS BEING USED

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1 HOW ARE YOUR TAX DOLLARS BEING USED Property taxes are comprised of residential and commercial real property, business personal property, motor vehicles and represent over 55% of the general revenue for the county. During the compilation of the annual budget, the County Manager puts forth a recommendation on the amount of funding that will be allocated each fiscal year to ensure that taxpayer dollars are used in the most efficient and equitable manner. The Board of County Commissioners may propose changes and will ultimately adopt the budget in a manner that will best serve the community. Below is a breakdown of the major services your tax dollars support. For every $1 in property tax, the following services are funded: 32 cents Human Services 28 cents Education 18 cents Public Safety 17 cents General Government Department of Social Services, Health Department, Veterans Services and Child Support Enforcement Cumberland County Schools and Fayetteville Technical Community College Sheriff s Office, Jail, School Resource Officers, Emergency Services, Animal Control, and Pre-Trial Services Facilities, Tax Administration, Register of Deeds, Information Services, Finance and Debt Service 3 cents Cultural & Recreation Libraries and various community agencies 2 cents Economic & Physical Development Planning, Engineering, Soil & Water Conservation, Public Utilities, Cooperative Extension and Community Development Cumberland County Budget FY

2 CUMBERLAND COUNTY FISCAL YEAR BUDGET OVERVIEW REVENUES: Property Tax The property tax is Cumberland County s largest revenue source, comprising 58% of all General Fund revenue. The total property tax revenue recommended for is $186,302,367. The following chart illustrates the impact of tax rates on the current year portion of the property tax: Property Tax FY17 Budget Projected Tax Collections without Revenue Neutral Projected Tax Collections with Revenue Neutral Tax Rate Total Tax Collections with $0.740 $0.782 $0.822 $171,698,155 $165,210,236 $174,810,291 $183,583,486 North Carolina General Statute (e) requires a statement of the revenue-neutral property tax rate for the budget. The following chart is offered in compliance with that statute. Additionally, the associated incremental revenue generated with each tax rate is shown. FY17 Revenue Neutral Rate Above Revenue Neutral Total $0.740 $0.782 $0.040 $0.822 Resulting additional tax revenue - Resulting additional tax revenue $9,600,056 $8,707,026 25

3 One of the significant challenges in determining a tax rate is the limited dollars that one penny on the tax rate generates. For the fiscal year, one penny on the tax rate will generate $2,232,571. This is less favorable than the effect of one penny in similar counties. County Revenue From 1-cent on the (FY16) Residential % of Tax Base Commercial % of Tax Base Cumberland $2,325,462 74% 26% New Hanover $3,019,731 73% 27% Durham $3,245,480 57% 43% Forsyth $3,282,614 70% 30% Guilford $4,738,528 68% 32% Sales Tax Another significant revenue source for the County is the sales tax. The N.C. Department of Revenue collects all sales tax revenues and distributes to counties. Sales tax accounts for more than 13% of all General Fund revenue. The fiscal year budget reflects anticipated growth of $847,256. Sales Tax Collections FY16 Adopted Budget FY17 budget Increase from FY17 to Percent Increase from FY17 to $41,038,421 $40,912,780 $41,760,036 $847, % Other General Fund Revenues Intergovernmental restricted revenues show a decrease of $6,640,518 (10.61%) in from the FY17 budget. This revenue category consists primarily of federal and state revenue/reimbursements that must be used for a specific purpose such as human services. Many times, these are grant related revenue sources and the full amount of appropriation is not known now. Budget amendments through the fiscal year will provide recognition of additional revenue as the year progresses. Solid Waste Revenues Solid Waste revenues have been analyzed extensively by the new Solid Waste Director. As an enterprise fund, the solid waste functions are required to generate revenue to cover all costs of the operation. To ensure the fund is revenue generating in a manner equitable to all consumers, some changes in fees are recommended in the budget. 26

4 Established in 1991, the household waste fee is the primary support of solid waste operations and has not been modified since inception. Currently the fee is $48 per year ($4.00 per month) and is proposed to increase to $56 per year ($4.67 per month). A summary of all recommended fees changes can be found in the Supplemental Items section of the recommended budget book. EXPENDITURES: Total General Fund FY17 Adopted Budget Department Requests Dollar Change from FY17 to $327,284,888 $333,943,327 $328,042,177 $757,289 Total recommended General Fund expenditures are $757,289 more than the FY17 adopted budget. Prior to producing a recommended budget, management reviews all departmental requests. For, this review resulted in management reductions of $3,070,621. Further reductions to personnel, operating and community funding total $2,830,529 bringing total expenditure reductions to $5,901,150. Positions Departments requested 60 new positions for the budget; however, only 29 are included in the recommended budget. Of those 29, 16 positions are applicable only in the event the Health Department continues to provide jail health services. The recognition of the remaining 13 positions does not increase actual County staffing. Two of the positions recommended for the Department of Social Services (DSS) are to be housed at Cape Fear Valley Hospital and fully funded by the hospital, requiring no County dollars. The remaining 7 DSS positions will be used to meet Adult Medicaid timeliness requirements. To offset this expense, 9 DSS time limited positions have been eliminated. The four (4) nurses in the Health Department are funded with Medicaid dollars. Currently these positions are staffed and paid from contractual services. The focus of the nursing positions is to assist with foster children and their needs as well as pregnancy care management. Total change in positions: Positions Requested by Departments Positions Full Time Positions (see note) 41 Note: 16 of the 29 recommended positions are applicable only if the Health Department continues to provide jail health services. 27

5 positions in recommended budget: Part Time Total Part Time Vacant Filled Vacant Filled Full Time Total Full Time Community Funding - Two new agencies sought funding in while several agencies requested additional funds above the FY17 funding levels. However, none of these requests were included in the recommended budget. Further, the budget reduces funds to existing agencies by 15%. The only exception to this is the United Way 211 service. This service is a critical resource in supporting emergency operations during major events. It is anticipated that community agencies will seek to work together, leveraging resources and improving efficiencies, as County departments will be doing in the upcoming year. FY17 Adopted Budget Agency Requests Dollar Change from FY17 to $788,982 $1,031,523 $671,460 ($117,522) Recurring needs - Expenditures for are impacted by recurring needs experiencing increased pressure as well. Highlights of these needs include Mental health funding recurring dollars in the amount of $4,528,149. [Recurring funds of $750,000 were reallocated to this expenditure category in FY17, however, additional dollars are needed to maintain this service at existing levels.] Foster care for the past 10 years foster care expense has experienced an average annual increase of $273,500 Education funding o $544,592 in additional support of Fayetteville Technical Community College for a total appropriation of $12,101,992 o Cumberland County School System total appropriation of $80,362,412 Cost of living adjustment at 2% effective mid-year - $916,955 28