The Aiken County Council recently approved the Fiscal Year (FY) 2020 budget without the originally proposed property tax increase. As amended, the budget reverses the tax hike and includes small salary increases for Aiken County employees. In addition, the reliance on one-time, non-recurring revenues to balance the budget is dramatically reduced.
There was no single “magic bullet” eliminating the proposed 3.1 mil tax hike. Instead, the Council exercised its due diligence and examined revenues and expenditures across the proposed budget. The Aiken County property tax rate will remain at 68.5 mils.
The budget amendment I drafted with the help of both Council and staff included numerous provisions. Expenses that could be covered under the current fiscal year’s forecasted surplus were pulled back. Small projects fitting under the Capital Projects Sales Tax (CPST) were shifted. Revenue estimates were reevaluated. Recurring revenues flowing into other funds were re-purposed for use within the General Fund. An offset for forecasted vacancies was implemented. And assumptions behind certain expenditures were revisited and adjusted downward.
In summary, many little things combined to produce the desired result. And while Council significantly amended the draft budget presented by Aiken County Administrator Clay Killian, Council and the Administrator remain aligned on budgetary priorities. We recognize the issues facing Aiken County, though the proposed solutions varied on certain points.
And the challenges we faced this year will continue into next year.
On the revenue side, the Local Government Fund passed by the South Carolina General Assembly declined over the last decade in both inflation-adjusted and nominal dollars. And non-recurring revenues, such as Winter Storm Pax reimbursements and the sale of surplus property, will be exhausted.
On the expenditure side, it costs more to simply “stand still” at Aiken County’s current staffing level. Despite no planned increases in salaries or headcount in the proposed budget, payroll expenses nevertheless rose by 2%. This is due to rising health care and retirement expenses. Most of this year’s property tax revenue growth will be used to maintain current headcount.
When Council looks at next year’s budget, it will continue to work toward competitive salaries while holding the line on property taxes. This will require considerable creativity.
Note that while holding the line on property taxes is good politics, it’s also good policy. Aiken County’s low millage rate attracts industrial and business investment. Counties with high millage rates have difficulty attracting new industry. In the globally competitive manufacturing environment, the millage rate is one of the few variables that Council controls.
And as I argued in the Aiken Standard last year, the CPST over the last decade stabilized property tax rates “within a narrow band between 65 to 75 mils.” Rates may fluctuate in the future, but since 2011 the trend has been downward from 74.7 mils to 68.5 mils.
Without the CPST, the millage for FY 2020 would have increased dramatically. But because of the CPST, this year’s proposed millage hike was avoided, and future tax rates should remain well within this band.
The FY 2020 budget demonstrates the Aiken County Council’s commitment to keeping taxes low and operating county government as efficiently as possible. I consider it a success.