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Spencer board mulls tax increase

By Emily Ford
eford@salisburypost.com

SPENCER — To balance the budget, Spencer aldermen will consider laying off several town employees and contracting out garbage collection and land management services.
Aldermen struggled through a budget workshop Tuesday night, considering proposals that could increase the tax rate, take money from the fund balance or both.
“The appetite for more services is driving what looks like it could potentially be the highest tax rate in the county,” Alderman Jeff Morris said. “I would not vote for a budget that would leave us at the bottom of the heap.”
Because the town’s tax base fell 8 percent during Rowan County’s revaluation process, Spencer would have to increase its 60 cent tax rate to 65.6 cents per $100 valuation to maintain a revenue-neutral budget, bringing in the same amount of money as last year.
Alderman Tracy Aitken said most people would pay the same amount of money with a revenue-neutral tax rate.
“Citizens don’t expect to pay less tax, especially this year,” Aitken said.
The revenue-neutral rate is a “no-brainer, as far as I’m concerned,” she said.
But Morris said Town Manager Larry Smith should decrease spending even more.
“You’ve not proposed enough cuts to satisfy me,” Morris said.
The budget is bare-bones, and further cuts would require layoffs, Smith said.
“Then propose lay-offs,” Alderman Scott Benfield said.
Morris asked Smith to prepare a budget with a 62.8-cent tax rate — halfway between the current rate and the revenue-neutral rate — with no money taken from the fund balance.
Smith said he would prepare the budget proposal “by any means necessary.”
If the town dips into the fund balance this year, future boards would continue to delve into savings until the county revaluates property again, Morris said. Eventually, the fund balance could dip below acceptable levels and the state would have to take over Spencer’s finances, he said.
Smith, who listened while Morris repeated his prediction several times, eventually responded.
“Nobody is even going to believe the doomsday scenario,” Smith said.
Spencer has been the most fiscally responsible municipality in Rowan County, growing its fund balance from 38 percent of operating funds to 56 percent in four years, he said.
Smith said he would never put the town in a position where the state had to take over.
Most towns in North Carolina will dip into their fund balances this year, Smith predicted. Spencer’s fund balance is $1.3 million.
Spencer’s peers across the state have on average a fund balance that is 65 percent of operating funds.
“We are already below our peer group,” Benfield said.
Morris said the budget proposals were unsustainable and included “reckless spending.”
“The more privatizing we do this year, the better off future boards will be,” Morris said.
Aldermen instructed Smith to seek bids for garbage collection and land management services, though Aitken did not want to consider privatizing land management services.
The town is considering switching from backyard garbage pickup to curbside service, which eventually would save $42,000 a year in labor and fuel charges.
But after seeing the low bid China Grove opened Tuesday for privatized garbage service, Spencer Public Works Director Jeff Bumgarner said Spencer also needs to consider contracting the service.
China Grove’s quote was $9.50 per can per month, which included curbside recycling service, Bumgarner said.
Spencer’s in-house service costs the town between $13 and $14 per can.
Smith must prepare a budget message, which includes a proposed tax rate and any deficit spending, by June 1.
At the next town board meeting June 14, aldermen will hold public hearings on the budget and eliminating backyard garbage collection.
They also will consider proposals to privatize garbage service and land management services and hear how many town workers could lose their jobs.

Contact reporter Emily Ford at 704-797-4264.

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