Smithfield Herald

Johnston commissioners pass $182 million budget

Johnston County Commissioners spared the schools a deep cut but kept spending in check in a $182 million budget passed Tuesday.

The measure, which passed without much debate, is nearly identical to County Manager Rick Hester’s proposal, with some extra allowances.

Hester’s proposal called for $179 million in spending, with a $150,000 cut to Johnston Community College and a $2 million cut to the public schools. Both had asked for an increase in funding in the year ahead.

The budget commissioners passed on Tuesday keeps county spending on JCC at its current level and cuts $400,000 from the public schools.

JCC President David Johnson, who lobbied publicly for more funding, said he was satisfied with the result, for now.

Johnson spoke twice to commissioners about the need to improve the college’s infrastructure. He showed them photos of parking-lot potholes, cracks in sidewalks and telltale signs of damage to the Wilson Building’s foundation.

“I wish things were better; don’t we all?” Johnson said. “But I am thankful to them for hearing us.”

The county’s allocation to JCC might be enough to begin some of the infrastructure work, Johnson said. The college could start, he said, by patching some of the sidewalks.

“I see this as a maintenance budget,” Johnson said. “It’ll allow us to maintain and make some minor repairs.”

Next budget year, the college will likely ask for more money again, Johnson said. His request this year called for an extra $400,000 to help hire new maintenance staff; Johnson says the current crew is overworked.

State funding up in the air

Commissioners said the budget preserves the county’s standard of keeping cash reserves equal to 15 percent of spending. But that could change, depending on the state budget.

The General Assembly had hoped to have a budget by July 1, but that now appears unlikely.

It’s an especially uncertain budget year, as both houses and the governor float different proposals for tax reform that could affect local government revenue.

Johnston commissioners said the uncertainty made budgeting especially hard this year. “When the legislature is talking about tax reform and has passed neither that nor a 2014 budget, it’s basically a shot in the dark to guess our revenues,” said Commissioner Allen Mims.

Mims added that he’s open to adding appropriations if a “favorable” budget – one that preserves the county’s revenue – passes in the General Assembly.

“That being said, it’s still imperative that we keep the 15-percent fund balance and the 78-cent tax rate,” Mims said.

Hester estimates the county’s cash reserves – or fund balance – to be at 15.2 percent of spending in the year head. But if the General Assembly adopts the state Senate’s budget, reserves would fall to 14.2 percent as the county dipped into savings to pay its bills. The Senate budget would cost counties some sales-tax receipts.

Johnston leaders want to keep reserves at 15 percent of spending because a healthy savings account is the key to borrowing money at low interest rates. In November, commissioners will ask voters to borrow $64 million for public school and community college buildings.

Mims said he expected the bond-rating agencies to give Johnston the benefit of the doubt if the county has to dip into savings in the coming year. The ratings agencies were similarly understanding during the recession, when reserves fell below 15 percent, he noted.

“Basically, they’ll understand … that we had no way to accurately guess what our revenues are,” Mims said. “They were understanding before; I’m guessing they’ll be understanding again.”