York County leaders are considering a change to the county budget that, if approved, would result in savings for taxpayers this year.
The proposal comes from a need to prevent the county from collecting more taxes than it needs - specifically for paying its debts, county staff say. But the change also would result in an overall tax decrease for county taxpayers.
The County Council approved a budget earlier this year that included an overall tax break. The reduction amounts to about $10 in savings on every $100,000 in property value.
In taking a closer look at how the council's tax reductions would impact the budget, county staff realized a snag.
Sign Up and Save
Get six months of free digital access to The Herald
With some county bonds set to be paid off this year, the county will need less money than what it expects to pay for its debts, County Manager Jim Baker said.
The problem, Baker said, is that the money generated in the account can't be used for any other purpose and will, therefore, accumulate unnecessarily.
Meanwhile, the county expects to spend more out of its general fund than it's bringing in as it has in past years. And again, reserves must make up the difference.
County staff have come up with a way to shift the tax revenue generated to pay debts into the general fund, where it can be used for other purposes. The way to do it is to adjust tax rates in different funds.
This is a smart move, Baker and other supporters say, because it will reduce the amount of money the county must draw from reserves to meet its expenses and lower taxes on taxpayers.
If approved, the county's plan would give taxpayers an additional $5 savings on every $100,000 in property values.
When the County Council approved tax cuts in June, supporters said taxpayers needed a break, even a small one, because many face higher tax bills this year as a result of higher property values.
The county recently reassessed property values for tax purposes, which it is required to do every five years. As a result, property values went up for 70 percent of property owners in York County.
Opponents of the tax cuts argued that cutting tax rates, even slightly - instead of holding taxes steady -might force the council to increase taxes later as the county scrambles to make up for lost revenue.
They also argued that lowering taxes without finding deeper cuts in the budget would force the county to make up for lost revenue by drawing even more from its reserves.
Though still undecided, Councilman David Bowman says he's leaning toward supporting Baker's recommendations to shift revenue not needed for paying debts into the general fund. Doing so will reduce the amount of money drawn from reserves to meet the county's expenses.
He's excited about the deeper cuts, too.
"The first time around, we had a minimal effect that was more for show, and now we have a real opportunity to give the taxpayers something back," he said.
Councilman Bump Roddey said he likes the plan, which allows the county to still "deliver" on tax cuts, while having more flexibility on how to use tax revenues.
But County Council Chairman Britt Blackwell isn't sold on the plan.
He's unclear about what Baker and county staff are proposing and wants more explanation. He also wants to be sure the tax reductions the county passed aren't "reversed."
Blackwell said he's worried about how changing their minds will look.
"I'm very, very tentative about reversing what we've already done and sending a message to the taxpayers that you can't count on what we do."
The County Council will revisit the plan at its Sept. 6 meeting and will hold a public hearing at its Sept. 19 meeting.