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Bath supervisors propose to cut budget
By Cynthia B. Coleman • Staff Writer
WARM SPRINGS - A proposed $1 million-plus cut to Bath County's budget was the result of a three-hour discussion Monday, but getting to that conclusion proved a challenge for officials, who picked the current $21,250,969 budget apart line by line.
Supervisors continued their preliminary work on the 2008-09 budget, resolved to press forward toward a final proposal to present to county residents and landowners.
All but supervisor Stuart Hall were present, and initial work had given the board a lower starting point of $21,033,957.
In order for revenue to match this amount, however, the county property tax rate would need to be increased from 45 cents per $100 of land value to 60.75 cents - a number that made supervisors uncomfortable.
"That increase covers what we've worked through and what we've done up to now (on the budget)," said supervisor Percy Nowlin. "That is a 15-cent increase over 45 cents, which is (a) 33 percent (rise). And the only thing I can tell the people is, it is a heck of a lot better than the 600 or 700 percent, which is what they were facing with the reassessment."
The county had recently neared completion of an annual reassessment, which resulted in enormous increases in property values; the board ended the contract with assessors after concluding Blue Ridge Mass Appraisal didn't have enough time to properly judge values.
Proposing school budget cuts
Nowlin led supervisors through his considerations of the proposed Bath County school budget, which was 30 pages long and, item by item, showed them what had already been trimmed.
While there are areas still needing adjustment, the school budget had been cut from $10,859,495 to $10,211,746, which, Nowlin said, is slightly less than last year's budget of $10,253,311.
Nowlin asked the board to look at the revenue sheet, which showed a decrease in the amount of money the county is required to contribute to education expenses. "This year," he said, "we put up $7,046,567 in county funds, and this (the cuts) would require $6,964,270. So it is a cut."
The board discussed the proposed school salary increases. School administrators had asked for a 5 percent pay increase for all staff.
Nowlin told the board he and Hall had met with consultant George Weikel, and Weikel made two suggestions for reducing insurance costs. The proposed reductions are in co-pay and deductions. "If you increase the co-pay a little bit and increase the deductions a little bit," Nowlin said, "you save 14.32 percent" per person on insurance.
Weikel told Nowlin and Hall that Bath County had the "Cadillac of all possible programs," and that he does not like the 100 percent coverage school employees have; Bath is the only county providing that kind of coverage, he said, and proposed school employees contribute some sort of co-pay to their insurance expenses.
Nowlin suggested a co-pay where the employee would pay $20 a month for individuals across the board, which would come to $240 a year.
"By doing that," Nowlin said, "we would get better bids (on insurance coverage) because the employees would have to put something into it."
Nowlin said he and Hall also had informal discussions with school board members about school salaries, and offered the idea of a flatraise of $1,200 per employee instead of a 5 percent increase. "It's entirely up to the board," Nowlin said, "and this would be the starting point; it would be $1,200 across the board. It would apply to everything from cooks to bus drivers to beginning teachers."
Nowlin used all current school employee salaries and with those figures came up with the $1,200 amount for each employee, which would, if approved, become effective July 1.
Supervisor Carol Hardbarger asked Nowlin if the flatamount of $1,200 given to teachers would be a larger increase than they would have received with the percent raise.
When Nowlin said that was correct, she said, "Then, that's good."
"The $1,200 is a big raise," Nowlin added. "My worry is, particularly for those people on the bottom, the cost of bread is going up, the cost of gas is going up, hospitalization is going to go up … that was my pitch for that. It's up to you all. And you may need time to look at this - I'm sure you will."
At the same time, Nowlin expressed concern for all school employees. "I would remind you that if we leave a whole lot of money in there, if they (the schools) wind up with a surplus, it gets spent elsewhere," he told the board.
Supervisor Richard Byrd chuckled. "You stated that very politically correct. You've been a very busy man," Byrd told Nowlin. "He studied that comment at the end a long time, I can tell you that."
Byrd was referring to ongoing concerns that Bath County schools spend down end-of-year surpluses instead of returning the money to the county's general fund, a point of contention that has been raised in previous years.
Proposing tax hikes
Several supervisors said this year and next are going to be tight financially, and there will have to be a tax increase.
"Something we've got to remember," said supervisor Jon Trees. "There is going to be a tax increase and Bath County salaries from tourism are unique … and everybody would like to get a fivepercent raise. Who wouldn't?"
Trees continued, "But in order to do that, taxes are going to have to go up that much more. And those people paying those increased taxes are hurting just like everybody else. And then, think about how much less our taxpayers, our blue-collared workers, are making than other counties in the state … the majority of our working-class people (don't have) the expendable income other localities do."
In discussing what rate to set taxes, Hardbarger said, "One of the things I've been thinking of - and I don't know how this would play out in the budget process - but we might be wise to implement a very, very, very small tax increase or no tax increase and cut services, and allow people to comprehend on some personal level what happens if the taxes stay the same and we continue to have to prioritize the mandated services. I think given what's been going on with the reassessment process and the complaints about wasteful spending that any kind of tax increase is going to be perceived as us throwing money away."
Nowlin replied, "Yes, we can go through here (the whole county budget) and I guess what you call nickel-and-dime it, but unless we cut out major stuff, like we cut out recreation or we cut schools back or a half a million dollars … that's going to be a problem, because we've been through this thing twice and have cut. There are still things in there but we're not going to be able to just increase 5 cents or 10 cents - we're going to have to do more than that."
The discussion between Hardbarger and Nowlin led the board to comb through the county and school budgets, finding items to cut. This process took more than an hour, with much discussion, debate and regret.
Trees expressed concern about diminishing tax revenue from the Dominion pumped storage station and the need to wean the county off its dependence on public service corporations.
Nowlin explained that in 2002, the hydroelectric utility paid $7.7 million in county taxes. This year, it only paid $4.9 million.
"We'll probably never get back to $7.7 (million), but hopefully we'll get back to $7 (million). But the only way to do that is with reassessment," Nowlin said.
"We've put a whole lot of money into a lot of our firedepartments and rescue squads - things like that," said Byrd. "We've created firedepartments. We've created equipment. And those things are expensive. And we're going to continue to do that because it's the only way we can provide that service to the county. We have no choice. But it is a fact that we've got to really look and see - and I hate to say this, I hate to say this."
With a pause and a deep breath, Byrd continued choosing his words carefully. "Is it appropriate to take from the taxpayer and give it to the taxpayer, in the amount of $1,200? We're taking from a taxpayer and giving it to a taxpayer. Those same people we are giving it to are paying taxes. Is it appropriate for us to do that and at the same time increase (for example) Mary Sue's taxes so we can give her a raise? Is that fair to what we are doing here? I don't know? Is that the right way to do it?"
"In my opinion, what we need to look at," said Trees, "we threw the assessment out, which put the burden on the taxpayers and away from public utilities. We have become dependent because historically, for 23 years, we have received this revenue from the pumped storage project. It has now become that we are dependent on that money for our operating budget. That's wrong."
"You're damned if you do; damned if you don't," Nowlin replied.
"Well, we need to go ahead and be damned," said Trees, "and start being damned for the next three years and lessen the dependency on that pumped storage project. If we raise taxes - (we) have to raise taxes - and continue with the way we've been spending, it's the perfect time for them to use us. It's time to change the way we do business."
Hardbarger added, "We threw out the assessment because there was absolute chaos and this public outcry to get rid of that assessment or do something about it. People had to understand what that meant. If they didn't, they need to be educated in what that meant."
Byrd repeatedly said the board needed to work on balancing expense cuts with raising revenue, while Trees hoped the board could work to establish a rainy day fund. Several board members agreed citizens would not let the board do that.
"If we had a surplus," Byrd said, "if we had 1.2 million in reserve, the people would eat us alive."
Board members discussed that county residents preferred cutting back or raising tax rates to having a surplus.
The cuts begin
Ultimately, supervisors proposed cutting or reducing the following items:
n Charitable groups annual requests - Tourism Trail Study from $5,800 to $3,000; 4-H Education Conference Center of Smith Mountain Lake from $1,000 to $500; and Shenandoah Valley Partnership dues from $6,191 to $0, thus terminating the membership.
n Bath County schools - Cut $200,000 from the school budget in the following categories: $100,000 instruction; $50,000 administration; $25,000 maintenance; and $25,000 in transportation.
With the above cuts, supervisors also recommend the following cuts to result in a savings of $1,072,291 in expenses:
n $200,000 cut (from no school employee raises); a 2 percent raise is scheduled in December 2008.
n $200,000 in school budget cuts recommended by Nowlin and the board.
n $525,000 - a 2.5 percent across the board budget cut in all departments in everything but salaries and compensation.
n $125,000 from the fund for the self-insured.
The above cuts would allow the proposed tax rate to drop from 60.75 cents to 51 cents, so the board proposed to set the tax rate at 51 cents.
With the reductions proposed, the county budget would be decreased to $19,983,957.
Supervisors also propose introducing a business license ordinance and increase the personal property tax rate from 20 cents to 40 cents.
All of the above cuts, recommendations and proposals are work in progress and are not final figures, totals or amounts.
The work session will continue on Monday, April 7 at 6 p.m. to finalize the budget proposal.
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