Johnston County’s tax rate hasn’t changed in 13 years, but county residents will have to wait more than a month to know the fate of their next tax bill.
In presenting a $209 million budget for 2016-17, County Manager Rick Hester proposes to keep the tax rate unchanged. His spending plan is up a modest 3 percent, or $6 million, over the current year. Missing from those preliminary numbers, though, is much room for the school board’s requested $63.2 million.
“The biggest numbers influencing my budget request are a 78-cent property tax rate and a 15 percent fund balance,” Hester said. “I have to keep it within those guidelines.”
By that, Hester means than county commissioners never want to see a tax increase in a proposed budget, and they want to keep cash savings at 15 percent of spending.
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Hester called 2015 a record year for Johnston County, pointing to the major economic-development wins of Novo Nordisk and Grifols expansions.
Over the next 15 years, the two companies will receive more than $100 million in tax incentives from the county, but Hester said they will still contribute to a growing tax base.
“We’re blessed to be where we are in terms of location; we’re fortunate to be in the Research Triangle area, which is one of the most desirable regions in the country,” Hester said. “The Johnston County economy has certainly picked up; building activity is very active in the residential, commercial and industrial areas.”
Without raising Johnston County’s property tax rate of 78 cents per $100 of assessed value, Hester sees the county leaning heavily on new residents and construction to make up the proposed $6 million budget increase.
As Raleigh’s suburban creep continues away from the city, Johnston has been the 10th fastest-growing county in North Carolina, according to census data. Since 2000, the county has added 60,000 residents, topping 184,000 this year, and Johnston’s population is expected to eclipse 200,000 in five years, growing to roughly the size of Fayetteville.
Earlier this month, Johnston schools asked for $63.2 million budget from the county next year, adding more than $8 million to the current year’s funding.
Hester didn’t recommend that kind of increase, but he then again, he never does. Years ago, county and school leaders settled on a funding formula that raises school spending only by inflation and growth in student population.
In their annual request, the schools have largely ignored the formula, but Hester hasn’t, leaving commissioners to decide whether to increase school spending beyond what the formula calls for.
For 2016-17, Hester built in a 2.5 percent increase in school operating expenses, for a budget of $55.3 million, plus another $1 million for capital outlay.
“I’m sure there will be discussion from board members,” he said of school spending. “We’ll have to wait and see.”
The board of education has been talking about addressing infrastructure and building needs that have fallen by the wayside, but Hester said the county has needs too. Among them are a piecemeal-built law enforcement center and jail bursting at the seams.
Included for now in next year’s budget is the first step toward a new jail in Smithfield. The current complex is overcrowded, and the board of commissioners has yet to decide what to do. The budget makes room for a $1 million design and engineering phase for a new 400-bed jail. Hester estimates a new complex could cost more than $30 million.
“Everybody’s cramped,” Hester said. “We want to work with the court system to free up some space for hearing rooms.”
The county won’t ease its space woes anytime soon though. Hester said even if commissioners agreed on a design and green-lit a bid, it would still take a year before construction could begin.
Propped up by population growth and industry investment, the county’s bond rating climbed last month to AA1, which will enabling Johnston to borrow money at lower interest rates. The county has recently used the better bond rating to refinance $12 million of debt, saving $500,000, Hester said.
Hester is asking for 14 new county jobs: seven social workers, four people in the sheriff’s office, two in the 911 center and one federally funded child-support employee. He’s also built pay hikes into his budget: 2 percent across the board and another 1 percent in merit increases. Hester said he hopes to increase salaries more over the next few years.
Drew Jackson: 919-553-7234, Ext. 104; @jdrewjackson