Explaining the opposing votes for lowering taxes | Eastern North Carolina Now

The Washington Daily News published an article on June 14, 2023 titled “County Manager explains opposing votes on the Board of Commissioners to lower taxes”.  I am glad to see the Daily News thinks this issue is newsworthy.  However, I have several questions about the information presented in this otherwise well written article.

Taxing property owners and those who pay sales tax is the most important thing commissioners do. Only County Commissioners decide how County tax money is spent.  State law mandates that certain services must be provided.  But State law does not mandate the level of service, or the cost of those services, or how much we pay employees, or how many employees we must have, or the number of vehicles we must have, or how we provide working places for our employees..  Commissioners have a lot of flexibility in managing how county government is run.  This includes the sacred cows of education and the sheriff. 

Moreover, there is more than one way revenue can be generated.  The Board of Commissioners has little or no direct control over sales taxes.  The rates are set by the Legislature.  The amount of revenue produced is thus determined by the amount of commerce that takes place in the county.  The most important decision Commissioners make is to set the tax rate on property, real estate and personal property (which includes vehicles).  In addition, the Board of Commissioners can borrow money to cover emergencies including managing cash flow (i.e. when expenses hit before the revenue comes in).

Every dollar that the county spends is approved by the Board of Commissioners in the form of an ordinance (a law).  That is why the budget process is so important.  Every county department, employee and charity wants to be included in the budget ordinance (law).  Ninety percent of what the public sees during the budget process is political.   A lot of miss information is fed to the public to justify increased spending, and services, and those gifts to some commissioners’ favorite charities.

With the coming of the new Republicans on the Board about 6 years ago and their collusion with the two Democrats on the Board, the budget process in Beaufort County has changed drastically.  Commissioners no longer examine spending.  They use the continuation budget.  This puts the County staff in charge, Those Commissioners who are a part of the Democrat-Republican coalition talk in the background with staff about what they want in the budget. If the staff agrees, items are then placed according to the continuation or expansion budget.

Oversimplified the “continuation budget process” means taking the prior year’s budget amount per line item and adjusting it for increases.  Those increases are what make up the expansion budget.

Now don’t miss this fine point.  The continuation budget is essentially based on the assumption that everything that was budgeted last year is repeated.  That increase repeats every year thereafter unless or until a reduction is voted on.  When they don’t look, they don’t find anything to reduce so it stays in the budget.  It is the same principle as “compound interest.”  Spending increases in one year are compounded every year thereafter until cuts are made.  In Beaufort County, in the last few years there has not been an honest search for where cuts can/should be made.  THAT is the fallacy of continuation budgeting.

Commissioners sitting as a board do not see the budget document until this process is complete.  Commissioners meeting as a board in public session then consider the budget.  Notice that there is not a process for commissioners sitting as a board to consider any changes in policy, services or efficiency in an orderly manner. Commissioners spent about 12 hours doing a seventy million dollar budget this year.  The budget was actually done by staff and during back room negotiations.  Should the conservative commissioners raise an issue, like spending cuts, tax reduction, or the wisdom of donations to favorite charities, they are promptly voted down by the Democrat-Republican coalition with their back up voter, Randy Walker.  (Rebholz is doing some conservative votes because he is running for reelection in 2024).

This is why Frankie Waters and John Rebholz continue to form the coalition with the Democrats.  That is RINOs  (Republicans In Name Only) Waters and Rebholz vote with  Democrats Langley and Booth to decide who the chairman and vice-chairman will be.  Commissioner Randy Walker has joined this elite group. This did not start with John Rebholz and  Frankie Waters.  Republicans Gary Brinn, Al Klemm and Ron Buzzeo (and before them, Jay McRoy) were activist participants when they were on the Board.

Each year this group becomes more efficient in doing the budget.  Less and less spending is looked at by the Board of Commissioners.  More and more issues come up and are voted on without debate or examination.  This year neither the School Board nor the Community College appeared before the Commissioners as a part of the review process.  There was no need to.  Everything was negotiated in the back room as a continuation budget and then new spending was added.  We are still funding free tuition at the community college, and we increased the Schools’ budget despite the fact that student enrollment is decreasing.  Wouldn’t you think that fewer students mean less money spent?  Not in Beaufort County.  The small amount of discussion at the budget meetings was only to provide a show to the public.  And, spending goes up and up every year.

We have a special problem on the Beaufort County Board of Commissioners.  It may not be illegal but it is not ethical in my opinion.  Two members of the School Board are married to (two) County Commissioners. The Booths and the Walkers.  Do you suppose discussion of the school budget comes up in those homes?  Is it any wonder education is so expensive and inferior in Beaufort County.  That’s what you get with no accountability.

The budget is the most important policy decision Commissioners make every year.  County Commissioners can do a lot with the budget process to stop bad policies, such as the transgender issues, the spending of millions of dollars for canned  “woke” curriculums that teach critical race theory and indoctrinate our children in socialism.  The majority of schools in Beaufort County have a “D” rating or less.  Can you honestly imagine throwing more and more money at low performing schools without the Commissioners questioning the accountability system?  No commissioner had an opportunity to ask questions about the quality of education in our schools or to address discipline problems in our schools because no one from the schools appeared before the BOC to answer questions.  Wouldn’t you like to know what is going to be done about this low performance by so many schools?

Going back to the Daily News article, there is a lot of misinformation in the article that is presented as gospel that is actually political opinion.  The Board of Commissioners is majority Republican.  You might think that would mean the majority of the Board is conservative. The majority does not subscribe to Republican principles. The Board does not support smaller government, lower taxes and less regulation.  This is because the liberals are in the majority.

Beaufort County Government is awash in money.   We have more than 25 million dollars in unencumbered money sitting in the bank.  This does not include the 5.6 million dollars that was deliberately dumped into a special capital projects fund to make our savings look smaller in order to argue against lowering taxes.  Anyone who says we do not have enough money is simply not telling the truth. 

State law mandates that our fund balance (unencumbered money) cannot go below eight percent  of the annual budget.  This is about 7 million dollars in Beaufort’s case. This is based on 8 percent being the amount of money required to run the county for an average  month.  The bulk of the property tax money comes in during October, November, and December of each year.  We get sales tax revenues, sent from Raleigh, four times each  year.  From a practical standpoint, considering all mandates, 20 million dollars in the bank at the beginning of July is more than enough money to  run the County government.  If things got really bad, we can borrow money from banks. We still have the authority to raise taxes.

The proposed tax cut would have amounted to about a 4-million-dollar reduction.  We have plenty of money to do that.  Arguments that we do not are false.  We have an increasing stream of money from sales taxes and taxes from new construction.  With these cash flows, reducing taxes by 5  cents can easily be  handled.

I take issue with the misleading statement in the article “The first lesson is the fund balance is designed to hold money that can be used when there is an unanticipated and/or unavoidable event that could have a negative effect on County finances and possibly put necessary public services in jeopardy”.  There is no mandate from the State for us to pile up money for unanticipated emergencies. How does one anticipate the size of the emergency.  When we are hit by a hurricane our cost typically never exceeds 4 million dollars.  The present fund balance is more than adequate.  We can always borrow money if a 40 foot  high tidal wave came in off Atlantic Ocean and ran up the Pamlico.  Let me be clear.  We should have a cushion for unanticipated events.  Four million dollars is plenty for that.  So there is still room for a tax cut.

Manager Alligood’s statement about not allowing tax rates to go up and down is also bogus.  A lot of money in the savings account and a constantly high tax rate make his job easier and requires no real management on his or the staff’s part.  Taxation theory says that taxes should be levied to pay for current expenses. That is, the taxpayers who pay should be the ones who benefit from those taxes.  The only exceptions are for special trust funds that require actions by political bodies to set up.  The best known example of this is the national Social Security Trust fund.  If one believes that taxes are only for current expenses, the tax rate should change every year.  There were and there still may be counties and cities in the state who set taxes every year to the closest one hundredth of a penny. It is called tax millage.  There is never a reason for governments to tax the public for uncertain and unknown events.

Another bogus argument presented by Alligood is that we would have to find a consistent source of revenue to maintain the 35 percent fund balance.  For one thing the fund balance does not have to be 35 percent and we already have a consistent source of money and that is the property tax. 

There is an advantage with the tax rate changing every year.  The public will keep a closer eye on spending and demand to know what caused the change (each year).  That is good government and accountability for elected commissioners.   The present system of tranquility allows the manager to sleep along with lazy commissioners.  Could it be that governments are run for the convenience of the employees and elected officials and not the public?   Beaufort County government is deep in the belly of “complacency.”

The public should be concerned that the five liberal commissioners have allowed the manager to answer for them on tax policy. This issue is political because we have more than enough money to reduce taxes.  So, money is not the issue. This behavior is in conformity with the bipartisan majority, they have always operated behind the scenes.  That is why they have hired a minister of propaganda.  Maybe we will hear from him next.

The Daily News has not done a lot of investigative reporting about government during the past several years.. They have made a journalistic error in not interviewing the five commissioners who are keeping taxes high.  I suspect they would be embarrassed to print the answers from these commissioners to the same questions presented to Alligood were presented to them before they got their talking points.  I am not sure four (the majority) of commissioners could give meaningful answers to these questions.  After all Frankie Waters announced several years ago that we would be following the recommendations of the staff, that being the case, there is no need to understand county financing.  Maybe we should fire the Commissioners and go with the staff

Seriously, ask yourself and your family/friends:  Who is trying to save taxpayer dollars and who is trying to hold down spending?  Do not vote for anyone who will not pledge to do that and do make that a primary criterion for who you do vote for in both the primary and general elections.  Ask anyone who asks for your vote for Commissioner what kind of plan do they have for reducing spending.

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