BY MILES LAYTON

EDENTON — If you saw our story after last week’s Chowan County Commission budget workshop, then you know that property tax rates are poised to stay the same for Fiscal Year 2025-26.

Though the Commission still has to formally adopt the budget at its next meeting at 6 p.m. on June 16, the property tax rate at 69.5 cents is not slated to increase.  

Last week, there was mention of raising taxes by 2.5 cents, but that talk faded after Commissioners cut a little here and a little more there and even made plans to spend money from the “rainy day” fund. And true, there was much public outcry about raising taxes, but the Commissioners, who are always reluctant to raise taxes, found a way to thread the needle by balancing the budget.  

Rather than “quote monger” — gather a large amount of quotes — from what Commissioners have been saying, let’s keep it simple — they sought to reduce expenses and keep tax rates the same or at least as low as possible. The Commission is a very cost conscious and fiscally conservative group.

FY 2024-25’s budget is around $21.3 million at a tax rate of $.695 cents per $100 of value on real and personal property. FY 2025-26’s budget that’s under consideration is just shy of $25.7 million — the difference between the two fiscal years’ budgets is around $4.3 million.  

Why has the budget grown by $4.3 million?

“The increase is due to the Economic Development grant for Timbermill Wind, the school system losing other revenues and increased costs and also increased costs and Cost of Living Adjustments (COLA) for county employees. The rest increases in operational costs and some capital costs,” County Manager Kevin Howard said. 

Long-story-short – Commissioners cut around $305,000 at the budget meeting.

This is an important point — Commission can only really affect between 15-20 percent of the budget because the remaining 80-85 percent is largely spent on ongoing operations and obligations.  

School employees sought a 5 percent raise (money that comes from local funds) – instead they got a 4 percent raise from county coffers. Schools get money from state and federal dollars — county supplements that budget. Graph shows how much the schools receive from various funding sources. Notice how much money is spent per pupil, also how many students (Average Daily Membership – ADM) that each district has relative to county appropriation rates.

County Commission Chairman Bob Kirby said there was a hole in the budget because Edenton-Chowan Schools’ budget projected shortfall for FY 2025-26. That’s not more money – that hole that was caused in part by planned raises and from parents choosing to send 67 students to schools somewhere other than Edenton-Chowan Schools — 565 students over the past 13 years. Put simply, the money to be spent on student education follows the student, whether that’s to Perquimans County or charter schools nearby.

County employees such as the Sheriff’s Office – Cost of Living Adjustment raise to be 3 percent. 

Emergency Management Agency’s $100,000 technology upgrades (servers) will have to hold for another year – a deferred expense that will need to be done at some point.  

Last step, Commissioners needed to fill a $200,000 hole, so they chose to dip into the unassigned fund balance, aka rainy day fund, by $100,000. Apply this analogy to a family finances – if you have to dip into savings to make ends meet, then unless you cut expenses or earn more money, you’re just kicking the can down the road. That said, county’s rainy day fund decreased a mere two percent – from 25% to around 23% held back in case of an emergency.  

The County holds back that much money in its unassigned fund balance because we are in a hurricane zone, and it’s good to be prepared in case of an emergency. Moreover, it’s best to have cash on hand to pay folks and make repairs rather than wait for money on the federal government’s timeline.  

Commission asked that the Edenton-Chowan Board of Education dip into its rainy day fund for the remaining $100,000. 

Money from Timbermill will fill the hole. Never thought I would say this, but thank God for the windmills. Love this scene from Landman. Yes, Timbermill pays a percentage to the county for adding those windmills to our skyline. That said, the County has to pay Timbermill around $2,076,322 to reimburse the company for the land. Later, as the land is paid off, more and more of Timbermill’s money will fill the County’s coffers.  

And finally, inflation has increased the cost of everything from the cost of a can of paint to the insurance rates.   

Last note — Howard would like to have budget workshops in July or August to better inform the community about how the budget process works — yes, it is complicated.