Agenda - 05-30-2013 - 2 - Laserfiche WebLink

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Economy and Future Budgets We do not see revenues for FY 2014 -15 increasing much above projections for FY 2013 -14. As a result, we anticipate General Fund budgets roughly the same without increased tax revenues or major reductions in services into the next several years. We continue to rely heavily upon residential property taxes as the largest revenue source to fund governmental services. A lack of tax base diversity, limited commercial retail options or building sites for expanding new businesses puts Orange County at a distinct disadvantage in being able to expand revenues other than increasing property taxes to support all public services, including education. Orange County continues to take significant steps toward improving county government operations by stressing efficiencies, encouraging innovation and pursuing opportunities to invest in efforts to enhance economic development options for the future. Partnerships with the Cities of Mebane and Durham enable and provide the needed utility infrastructure at two very important economic development zones along 1 -85. Improved cooperation and collaboration with the Towns of Chapel Hill, Carrboro and Hillsborough have offered enhanced abilities to work together to encourage local business expansion and new businesses to consider Orange County as a viable location to do business. You are in the process of committing to new initiatives and programs that will require new revenues or reallocation of resources away from traditional services and programs that are a part of Orange County's basis of being. Human Services, Environmental Standards, Educational Excellence and other icons that make Orange County special will be compromised or limited if we continue our significant dependence upon the residential tax base. Planned actions on the horizon demand future revenue allocations and all are important to the County's future needs: • Debt service on utility infrastructure to be constructed for economic development in the business development districts (1/4 cent Sales Tax allocation) • The new debt service for school related capital projects for both school districts. • Improvements and capital needs for both School Districts and the County • Impacts upon operational expenses for education inclusive of the two school districts and community college are under stress now and will be further strained in the future • Increases in existing and retired county employee benefit expenses create future fiscal demands • Impacts of Federal and State budget actions that shift financial obligations to the County for many basic services including education. • Limited capacity to add new debt beyond FY 2016 -17 The Board of County Commissioners should discuss its position relative to an increase in the tax rate in the coming fiscal year, or in the FY 2014 -15 budget. If we are to meet future expenses for education, debt service and other county services /programs that will arise in coming year's new revenue will be required. We must address future capital needs in a comprehensive manner. The consideration of a bond referendum and issuance of debt must be considered to address future capital needs of both the County and the two school districts. 10