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This is made up of inventory and intangibles tax reimbursements of $454,000, beer and wine taxes
<br />of $195,000, and Homestead reimbursements of $62,000. One cent of the tax rate at 100°fo
<br />collection rate is $907,000, and the tax rate equivalent is .78 cents. Alamance County stands to
<br />lase about $1.6 million, and the tax rate equivalent is 1.78 cents. Caswell County stands to lase
<br />about $234,000, and the tax rate equivalent is a little over two cents. Chatham County's tax rate
<br />equivalent is 1.34 cents. Durham County stands to lase about $3.5 million dollars, which is not
<br />quite two cents. Person County stands to lose about $350,000 and Wake County stands to lose
<br />about $4.2 million. Regarding the towns in Orange County, Carrboro will lose about $298,000,
<br />Chapel Hill will lose about $1 million, Hillsborough will lose about $159,000, and Mebane will lose
<br />about $311,000. Donna Dean said that she will get the tax rate information on the municipalities at
<br />a later date.
<br />Donna Dean made reference to the chart on the orange sheet. In reference to lapsed
<br />salaries, a savings is expected of between $560,000 to $625,000. It is also expected that there will
<br />be some under spending in County operations of between $250,000 to $375,000. All in all on the
<br />spending side, we think that we will have some savings between $850,000 to $900,000 to offset
<br />the loss from the state. The other good news is that the Register of Deeds has seen an increase in
<br />workload. It is projected that the revenues will come in $300,000 to $400,000 over budget this
<br />year. Other fees are also coming in aver budget between $100,000 to $200,000. Regarding
<br />revenues, investment earnings have dropped between $900,000 to $1 million. The second quarter
<br />sales tax was received last week and it was not quite as healthy as the first quarter. There was a
<br />significant decrease from last year at this time. Preliminary estimates are that we will be under
<br />budget between $350,000 to $650,000. The net of all these changes is a deficit of between
<br />$712,000 to $862,000. The good news is that the fund balance is $13.5 million. The fund balance
<br />is there for such unforeseen emergencies. The budget staff is looking weekly at expenditures and
<br />revenues and will be bringing in periodic updates.
<br />Commissioner Gordon asked about the reasons for maintaining the fund balance at its
<br />current level. John Link said that in the 1930's, the General Assembly enacted the Fiscal Control
<br />Act for the counties, cities, and towns because over 60 counties in the state went bankrupt in The
<br />Depression. The General Assembly should have enacted the same Fiscal Control Act on
<br />themselves in the 30's. Since the 1930'x, counties, cities, and towns have been very fiscally
<br />responsible and there have been no other financial crises in local government in North Carolina. In
<br />1988-1991 when the discussion about inventory and intangible tax was brewing in the state, the
<br />Governor at that time promised that there would be no loss of revenue to the counties, towns, and
<br />cities. He thinks that there is a moral, ethical, and legal responsibility on the state to respond and
<br />let us have the money due us.
<br />Commissioner Carey said that there is also a responsibility of the state to take care of the
<br />operating needs of the school systems, which has been transferred to counties over the last 25-40
<br />years.
<br />Commissioner Halkiotis said that he does not feel that we are responsible for the pain that
<br />everybody is being asked to share in. He said that he would not be surprised if the state asked
<br />Orange County for some of its fund balance.
<br />Chair Jacobs made reference to the draft letter to Governor Easley, which was distributed.
<br />This will be finalized for signatures by all County Commissioners. He said that one of the
<br />statements in the letter that bears repeating is that it is time for the state government to unshackle
<br />local governments and give us more flexibility in adopting revenue-generating alternatives. He
<br />said that rather than continue along the same course of being dependent on the state government
<br />for monies which are owed us and which it may or may not choose to reimburse, we ought to
<br />change to a system where we have more control at the local level of our own destiny and to tailor
<br />what we do as local governments to what the citizens in our locality want us to do.
<br />Commissioner Brown suggested asking the Governor to support these things and make
<br />sure that what we are asking for is very clear.
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