MATTHEWS – The Matthews Board of Commissioners has moved closer to approving next year’s fiscal budget.
Three commissioners and Mayor Paul Bailey indicated in a straw vote at a budget workshop on June 3 that they would support the $25.6 million budget proposed by Town Manager Hazen Blodgett.
The board received a slightly revised 2019-20 budget at a public hearing on May 28 that saw Blodgett recommend an additional $125,000 in cuts. The proposed budget is a 2.95% increase from the current fiscal year.
The proposed new tax rate is $0.28 per $100 of assessed value, which is a drop from the current $0.355 tax rate. The revenue-neutral tax rate, which would be the rate for the town to take in the same amount of money next year as it did this year while factoring in average natural growth, is $0.2613.
Blodgett said that means the proposed budget is recommending a tax rate of 1.87 cents above revenue neutral, or a 4.25% increase.
Mecklenburg County recently completed a revaluation, and on average, property values increased 38% in town. Blodgett presented the board on May 28 with a presentation on the impact of the additional 1.87-cent tax increase above the revenue neutral rate. Blodgett told the board that 80% of residential tax bills would see an increase, 60% would see no more than a $10 a month increase while 20% would see their tax bills increase more than $10 a month. Twenty percent of residential tax bills would see a decrease.
As an example, Blodgett told the board if a home’s value went from $250,000 to $350,000 (an increase of 40.41%), the tax increase would equal less than $8 per month.
“This is a pretty good test case,” Blodgett said.
In addition to Bailey, commissioners Barbara Dement, Jeff Miller and Chris Melton have indicated they support the proposed budget. Melton was not at the June 3 workshop but called Bailey before the meeting to indicate his support.
Commissioners John Urban and Kress Query voiced opposition to the budget as it is currently proposed. Commissioner John Higdon did not attend the June 3 meeting.
Urban would like to see the $125,000 in cuts used to reduce the tax rate by a quarter-penny instead of using that savings to pave additional roads, as Blodgett has proposed. Query said he wanted to see a rate closer to revenue neutral so taxpayers would not see an increase for a second consecutive year.
“I can’t accept where we are now,” Query said.
The proposed budget includes adding four new personnel to the police department, fully funding the fire department and EMS switch to a 24-hour staffing model and a 3% salary increase pool for full-time employees.
The new tax rate will also apply to personal property, which was not reassessed. A vehicle worth $20,000 was assessed $71 in Matthews personal property taxes last year but under the proposed new rate, that same vehicle would be assessed $56 this year. Town revenues for personal property will be reduced by $230,000.
Town leaders had asked Blodgett to find areas in the budget that could be cut at a budget workshop on May 20 to reduce the proposed tax increase above revenue neutral. The $125,000 in cuts would reduce the tax rate down to 0.2775 but Blodgett recommended that the $125,000 be used for additional paving of the town’s roads.
“We went back to the department heads and we talked about where we could find the money,” Blodgett said. “This was not an easy exercise. We did come up with $125,000 in cuts. This does create the potential to decrease the budget by a quarter of a penny. However, I am not recommending that we do that.
“What I am recommending, instead of decreasing the tax rate, we take that $125,000 in savings and we transfer it into our capital improvement plan and do additional paving. Our streets are starting to age.’’
Blodgett also told the board at its May 28 meeting that revenues for the current fiscal year could be about $370,000 above projections. Higdon asked Blodgett where that “windfall’’ would be going.
“It could conceivably be used to offset some of this tax increase,” Higdon asked.
Blodgett said he is recommending the money go into the town’s general fund balance, or savings account, that could be used for future capital improvements.
The board is scheduled to vote on the budget at its June 10 meeting.