Guilford County Commissioner Billy Yow (right) said, “When the time comes, there’s gonna be a tax increase. There’s nothing any of us can do about it. And people knows that day’s a-comin’. But it doesn’t have to be today.” (photo by Jordan Green)
Guilford County Manager Brenda
Jones Fox is proposing that the
county maintain a flat debt service
level in FY 2011, at $77 million.
Over the next two years, the county’s debt
service payments could make a “dramatic
jump” to $98.4 million in FY 2012 and then
to $112 million in 2013, before gradually
tapering off, in what Budget Management
and Evaluation Director Michael Halford
calls “the worst case scenario.”
The county is going to have to tackle its
debt to pay for its new jail and new schools.
Guilford County voters approved a $412.3
million school bond and $114.6 million bond
to build the new Guilford County Detention
Center in May 2008. The bad news for the
county is that the valuation of taxable property
in Guilford County is expected decrease
by 1.4 percent between now and the coming
budget year.
“When citizens voted for this debt,
they voted to pay for it,” Democratic
Commissioner Kirk Perkins said during a
work session on May 18. “That looks like a
cliff we’re getting ready to ride off.”
Perkins asked Fox to articulate her plan
for when the county’s debt service payments
jump by $40 million.
“The following year, maybe luck will be
with us, and we can do some restructuring,”
Fox replied.
The uncertain outlook prompted Perkins to
utter the dreaded “T” word.
“Nobody likes taxes, but majority rules and
the majority voted for this jail that’s $100
million, and these schools,” he said.
Chairman Skip Alston, a Democrat, was
having none of it.
“Let me say this: The easiest way to solve
that is to raise taxes,” he said. “If we were to
kinda put a little elbow grease to it, put some
brain power and think outside the box, there
are other ways we can resolve that debt….
The sales taxes were down about $8 million
this year. Hopefully, people will start spending.
To say ‘raise taxes’ just because we’re
looking at a $40 million [increase] next year
I think is irresponsible…. ‘We should raise
taxes about 10 cents’ — that’s the easy way
out. That’s the way we’ve been doing it in the
past. The same people we’re asking for that
10 cents are the same people who lost their
jobs or had their homes foreclosed upon.”
Among both Democratic and Republican
members of the commission, however, a consensus
is emerging that a tax increase might
be necessary, if not next year, then possibly
the one after that.
“Every year we say, ‘Maybe we can avoid
a tax increase,’” Democrat John Parks said.
“There may be a situation where future
boards, this is what they might have to contend
with. It’s not a bright picture.”
Republican Billy Yow agreed: “When the
time comes, there’s gonna be a tax increase.
There’s nothing any of us can do about it.
And people knows that day’s a-comin’. But it
doesn’t have to be today.”
Perkins and Democrat Paul Gibson suggested
two possible alternatives to increasing
the property tax: respectively, a moratorium
on issuing new bonds for schools and a quarter-
cent sales tax.
Following the manager’s bleak debt service
report, a delegation from Guilford County
Schools asked the county commission to
borrow $16.8 million in interest-free federal
stimulus bonds to cover critical maintenance
needs.
The Qualified School Construction Bonds
would pay for 28 maintenance projects at
23 schools, including replacement of roofs,
windows and doors and HVAC systems. The
schools on the list include Western Guilford
High School, Southwest Guilford High
School, Guilford Middle School, Northeast
Middle School and Alderman Elementary.
The county used an initial increment of $17
million for new construction projects to
defray costs of the 2008 school bond
projects.
“Anytime we know that we introduce
moisture into our classroom environment,
subsequently we have an indoor air quality
issue; it turns into mold and mildew,”
Maintenance Director Gerald Greeson said.
“Every time it rains they don’t have to
send in work orders,” Greeson said, of
Western Guilford High School.
“Our staff,
we mobilize to Western Guilford…. When
we mobilized to Western Guilford for this
last rain on Monday morning, we had a
media center that had a leaking roof. We had
to put buckets out. We had a large trash bin.
A media center, as you know, is not a gymnasium.
Inside, you’ve got books, you’ve got
computers.”
Guilford County Schools is constrained
from spending bond money on maintenance
because it’s already been pledged for new
construction projects. Alston said the choice
before the commissioners is to decide whether
to apply the $16.8 million stimulus bonds
towards paying down the bond debt — saving
county taxpayers about $5 million — or
allow the school system to spend it on maintenance.
Fox said the county currently does not
have the money requested for maintenance,
so “effectively it would be a tax increase.”
Even so, commissioners couldn’t bring
themselves to say no to the schools. They
formally approved a resolution to borrow the
money under the federal stimulus program on
May 20. !
Spag
