Agenda - 02-18-2002 - 1 - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 18, 2002 Action Agenda Item No. 1 SUBJECT: State Budget Shortfall Impacts on Orange County DEPARTMENT: County ManagerBudget PUBLIC HEARING: (YIN) ATTACHMENT(5): 215102 Governors Executive Order INFORMATION CONTACT: NCACC Analysis of County Impacts from John Link or Rod eraser, 245-2300 Governor s Budget Actions Donna Dean, 245-2151 1131102 NCACC Letter to Governor TELEPHONE NUMBERS: Loch SOCC Letter o Goodman Hillsborough 732-8181 (to be provided under separate cover) Chapel Hill 968AS01 Table-2001-02 County Budget Update Durham 688-7331 (to be pmvitled under separate cove) Mebane 336-227-2031 PURPOSE: To receive and discuss a staff report regarding impacts of the FY 2001-02State budget shortfall on Orange County's FY 2001-02 budget and on the possible Impacts of anticipated FY 2002-03 Sate budget problems for Orange Countys next fiscal year BACKGROUND: As has been well documented in the media during recent months, the State of North Carolina is facing mounfing budget problems for the current fiscal year Governor Easley issued an executive order on February 5 outlining directives to State government officials on measures that would be taken to ensure that the State's FY 2001-02 budget remains in balance. The estimated fiscal Impact of the Governors action would be savings of approximately$1.2 billion as a hedge against a projected Safe budget deficit of at least$900 million. The North Carolina Association 01 County Commissioners(NCACC) Board of Directors had written to the Governor on January 3Y, 2002, citing adverse Impacts on county finances from the economic downturn that parallel the covered Impacts being felt by the State, and urging him not to delay or sequester inventory tax reimbursements to county governments. That notwithstanding, among the measures specified by the Governor in his February 5 executive order were the withholding of various revenue sources earmarked in the State budget far distribution to county and municipal governments, and relied upon by those governments when they adopted their FY2001-02 budgets. Revenues the Governorplans to withhold include not only inventory tax reimbursemems, but also beer and wine excise taxes, and property ax homestead exemption reimbursements. NCACC disseminated an analysis of the Impacts on each of the State's 100 counties resulting from the Governor'a stated Intention to retain the revenues noted For Orange County the estimated loss of revenue for FY 2001-02 would be approximately$712,000. Thk represents the equivalent of about plant tenths of one cent on the County's 2001-02 General Fund tax rate.