Education accounts for the greatest share of expenditures, at 25 percent of the budget. Next is public safety at 23 percent, followed by human services at 22 percent — though much of this funding comes from state and federal sources rather than local — and general government at 17 percent. Cultural, recreation, non-education debt, economic and physical development and transportation each make up less than 10 percent of the proposed budget.
The decrease is due to budget impacts caused by the COVID-19 pandemic. The virus has caused the county to incur new expenses in order to support needs surrounding increased cleaning and sanitation as well as the heightened importance of electronic communication and telework. It is also expected to take a bite out of sales tax income, which in the 2019-2020 budget accounted for 21.1 percent of expected revenues.
How much of a bite, though, is a guessing game. County Manager Don Adams based his proposed budget on a 2 percent decrease from current year estimates, which represents an even larger drop from actual revenues prior to coronavirus closures.
“Up until the pandemic occurred, Jackson County was experiencing tremendous growth within our community,” Adams wrote in his budget message. “The first eight months (July 19-Feb. 20) of sales tax revenue surpassed last year’s revenues by over 12 percent. This is over 7 percent more than budgeted.”
That means that, assuming March revenues remain mostly flat, sales tax could decline by 14 percent between May and June without causing the budget to come up short. Should additional funds be needed to cover planned expenditures, the county’s fund balance will be used to make up the difference. Because sales tax distributions come in three months after their initial collection, the pandemic’s impact is not yet known.
The proposed 2 percent reduction from current year estimates is based on the assumption that sales tax receipts will make a gradual comeback over the first three months of the fiscal year, returning to normal by October, Adams wrote. Despite the pandemic, significant construction projects are ongoing in the county, and this is expected to contribute to the rebound.
However, uncertainty as to what the next year will bring combined with the expected arrival of federal funds to help with coronavirus-related expenses prompted Adams to recommend that the county delay certain purchases until January and revisit certain line items at that time as well.
The county is slated to receive $965,000 from the N.C. Coronavirus Relief Fund under the Federal CARES Act, he said. The money will be used to offset new and existing costs associated with COVID-19, and there is also potential for the county to receive additional funding to offset revenue losses. Jackson County Public Schools and Southwestern Community College will also receive funds related to COVID-19.
One of the categories in which delayed purchasing is recommended is the $629,000 budgeted for equipment such as computers, servers, printers, software, phone systems, taser and car video replacements for law enforcement and garage, cleaning, grounds maintenance, recreation and emergency communication equipment.
Decisions as to which exact products to purchase within these categories might be influenced by how quickly normalcy resumes and what aspects of public life the virus continues to affect over the longer term. If a significant number of staff are still working from home by January, for example, the county might decide to buy a laptop where previously it might have chosen a desktop unit. Delaying the expenses will also allow the county to better understand which purchases federal and state funding will cover and which must be made with local revenue streams. There will be better information on sales tax numbers at that time as well.
In January, commissioners will also discuss whether the county can afford a cost-of-living increase for employees. A one-step increase for all employees aimed at boosting retention is included in the recommended budget — this will cost $445,000 — but due to lack of funding a previously planned cost-of-living increase is not.
Additionally, January 2021 will include discussion of funding levels for Jackson County Public Schools, SCC and Jackson County libraries. The proposed budget includes level funding for each of these entities, but that could change in one direction or another depending on the situation six months from now.
While times are uncertain, for now the county plans to move ahead with its 2018-2022 capital improvement plan for facilities. In 2020-21, this will include finishing renovations to the health department building in September, starting construction on the Animal Rescue Center in Dillsboro and by the end of the fiscal year beginning schematic design work on long-awaited renovations to the Jackson County Justice Center.