TAX NEWS - June 2010

Lumberton council set to adopt budget, tax rate unchanged

LUMBERTON - The City Council will hold a public hearing Monday before a final vote on its $77 million budget proposal for next fiscal year.

The "bare-bone" budget slashes spending by more than $3.8 million compared with this year and includes no employee raises and a hiring freeze.

The spending plan maintains the tax rate of 63 cents for every $100 worth of property, which after revaluations would mean a tax bill increase of between 9 percent and 12 percent for the average city property owner.

County property tax collections are slated to increase by similar margins in the Board of Commissioners' proposed budget, thanks to revaluations.

City Council members said they would have liked to have lowered the tax rate, but no motions were made during budget negotiations to change it.

"I understand there was a significant shortfall out of the gate," Councilman Erich Hackney said. "That, combined with what was mandated by the state ... didn't allow any wiggle room for us to consider reducing the tax rate."

The proposed budget does not raise water and sewer rates, electric rates or any city fees.

City Manager Wayne Horne said state mandated increases in the amount of money local governments pay toward employee retirements combined with a 9 percent increase in health insurance costs made the budget difficult to craft.

Even with spending cuts, Horne said, city finance officials are projecting another budget shortfall of about $650,000 this time next year.

Officials said the city might see a bit of budgetary relief thanks to new privilege license fees and taxes charged to sweepstakes gaming parlors - a set of businesses most council members say they wish they could ban.

The city could generate more than $1 million in revenue from a $5,000 privilege tax and a fee of $2,500 per machine charged to the controversial gaming businesses, finance officials said.

Budget writers are waiting to count the revenue projections toward the general fund while state lawmakers consider legislation to reform the sweepstakes industry, officials said.

The City Council is scheduled to vote on the budget during its meeting at 7 p.m. The fiscal year begins July 1.