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is working with counties to determine ways to reduce the counties' <br /> dependence on property tax and increase options for generating <br /> revenues. <br /> Expenditures <br /> 1 . School funding. Currently 51% of the county budget supports local <br /> schools and Durham Technical Community College. The board discussed <br /> how funding levels were set and learned that in 2000, the board of <br /> commissioners met with the school board and agreed to a target of <br /> 48.1%. The following options were discussed for determining funding for <br /> schools by tying funding to: <br /> a. Annual increase in real property valuations <br /> b. Consumer price index <br /> 2. Debt service. Board members were asked to consider how much the <br /> county should take on in debt. The county is currently committed to $30 <br /> million with additional projects such as parks, affordable housing and <br /> Gateway needing funding. <br /> 3. General fund. Based on historical trends, natural growth in county <br /> revenue from property tax is projected to grow by about 3.9%. This is <br /> exclusive of revenue increases tied to recent real property revaluations. <br /> However, the growth in revenue could be less due to the decline in <br /> housing sales. Historical trends in expenditure growth is about 5.4% <br /> Policy Issues for Board Consideration <br /> 1 . Based on preliminary projections shared with the Board in September <br /> 2008, there is a projected $10 million gap between revenues and <br /> expenditures. Options for closing the gap include: <br /> a. Reducing expenditures and raise revenues. <br /> b. Looking for other sources of revenues. <br /> c. Growing the commercial tax base. <br /> 2. If the board decides not to increase taxes and stay with the revenue <br /> neutral tax rate for FY 2009-10: <br /> a. What would the revenue neutral tax rate be and how much <br /> revenue will that generate? <br /> b. How to determine the level of funding for schools and other county <br /> priorities? <br /> 3. What level of funding should be provided for schools? Should schools be <br /> asked to "share the pain" with other priorities? Options to consider: <br /> a. Cap expenditures at 48.1% <br /> b. Do not use a ceiling for expenditures and consider other methods <br /> 2 <br />