Editorial: Budgets for coming year more of an educated guess than usual

Published 12:00 am Tuesday, May 19, 2020

It’s unusual for managers of municipal and county governments to propose a budget to their board or council by saying he or she hopes it turns out to be wrong, but that’s essentially what Aaron Church did Monday when he introduced the spending document to Rowan County commissioners.

County Manager Church like his peers across the country are facing the uncertainty of not knowing exactly what sales tax revenue will look like in the coming months. Because of the way the state handles sales tax revenue, Rowan County still isn’t sure what March and April looked like. By the time Rowan and its municipalities find out, budgets likely will already be approved for the coming year.

Budgets are always somewhat of a guess. That’s why most governments usually pass amendments during the year as things change. Even the most experienced finance directors will find final numbers don’t perfectly match up with estimates one year earlier.

But this year’s COVID-19 uncertainty makes budgets even more of an educated guess. Rowan County’s technically cuts capital funding for Rowan-Salisbury Schools, but that’s only because there’s an expectation that sales tax revenue will be lower. If that’s not the case, funding could stay the same or increase.

Rowan County is pressing pause on all school construction requests, including a combined Knox Middle and Overton Elementary as well as the technology education complex at Rowan-Cabarrus Community College. That’s due in large part to the uncertainty, too. Church said Monday he wanted to take time to see how things play out in the upcoming budget year, which starts on July 1. Commissioners Chairman Greg Edds said he had already spoken with local education leaders and that they understood the need for the decision.

There’s a growing public consensus that COVID-19 is here to stay for a while, even if the curve is flattened. It’s not yet clear how policymakers like the president, governors, mayors and county commissioners will react. Without a vaccine, another shutdown could be looming a few months in the future. Depending on local attitudes, consumers could wind up spending less, even if things “reopen.”

Church called the spending document a “tight, conservative” budget, but he told commissioners he’s hoping it’s too conservative and that things will improve. Otherwise, there could be cuts or tax increases on the way. Church said as much when he said a tax increase could be needed in the 2022 fiscal year, which starts July 1, 2021, if sales tax revenue from the upcoming year is overstated in the county’s budget.

Comments