First step in budgeting: Know spending limits

info@islandpacket.comMarch 22, 2013 

Beaufort does well to begin budget discussions by examining ways to increase revenue and spread the financial burden of paying for city services.

The benefit is this: Many of the fundraising options discussed so far have proved unpalatable to taxpayers in the past.

That might not be enough incentive to shift the focus from spreading the burden of government to minimizing it, but at least the city will enter the next phase of budget-making -- the expenditure side -- with clearer ideas about what it can afford. After all, most of us tend to make bad decisions when we buy something before we know how we'll pay for it.

Indeed, projections property tax revenue indicate the city could have less money to spend in the future.

Upcoming, countywide property reassessment will almost certainly mean a smaller tax base for the city and other local governments. Beaufort expects its property tax base to decrease from $62.4 million to $58 million, reducing revenue by $350,000 to $500,000 in the next fiscal year if the city's property tax rate stays the same.

Seeking ways to offset the loss, City Council on Tuesday discussed a local-option sales tax and transportation fees, among other possibilities.

But no municipality acting on its own can impose the version of the local-option sales tax looked at Tuesday. That would require countywide approval and implementation. And although Beaufort County voters have twice approved a 1 percent sales tax for road improvements, they have twice rejected the type of sales tax now being discussed. And most of the money raised -- 71 percent -- would have to go to reducing property taxes.

A proposal for a $35 "road-service fee" for all vehicles registered in the city fell with a thud last spring, when the council also looked the fee as a way to balance its budget.

But other fees could gain traction.

City manager Scott Dadson said a parks fee could offset the $1.9 million cost of maintaining city parks. Schools, hospitals and nonprofit organizations, which don't pay taxes, could be charged fire or EMS fees. So could non-residents who cause vehicle crashes that require emergency response.

Of course, these options don't spread the financial burden but concentrate it on those benefiting most directly from public services -- another response governments have used to meet costs.

Tuesday's was the third recent discussion of revenue for the next fiscal year. Several presentations about expenses are to begin at next Tuesday's 5 p.m. work session. Whatever course the city takes with its budget, it is at least off to a good start -- doing its work in the open and considering what is in the bank before making out its spending list.

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