As if the destruction Hurricane Matthew left when it swept across Beaufort County wasn’t enough, the storm may have one more thing to give us — higher taxes.
October’s storm has so far cost the county more than $34 million — a figure that has steadily ticked up since contractors began submitting invoices early this year. It could ultimately exceed $50 million, according to county estimates.
“We have ongoing expenditures that are being submitted to (the Federal Emergency Management Agency),” county administrator Gary Kubic said earlier this week, “and as of this time we do not have any reimbursements.”
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“We are now in a new hurricane season,” Kubic said. “Our priority has to include … a reserve (of cash) adequate and sufficient” to deal with the potential for another costly storm.
It remains unclear when FEMA will reimburse the county for hurricane cleanup or how much of those costs will be covered.
But Kubic warned that “no one should make the assumption that at some future point in time we will be reimbursed dollar for dollar.”
“This all leads to next year’s budget when council will consider what would be necessary in increased (property tax revenue) to cover the gaps,” he said.
If the county does raise property taxes, it will be third time is as many years.
The county issued $30 million in short-term bonds earlier this week to bolster its reserve fund.
“When we have an extraordinary event like a hurricane, (cash flows) are obviously going to change,” county treasurer Maria Walls told Beaufort County Council members earlier this week. “... Had we not done a (bond issuance), I would have been concerned.”
While the bonds provide a critical cash backstop should the county be hit with another storm, the money is essentially a loan and must be paid back, creating the possibility of higher taxes in the future.
As county and municipal leaders navigate the 2018 fiscal year and prepare for the following fiscal year budget, officials “are going to have to forecast whether (they) are going to have to add additional (taxes) to restore (money spent repaying) all of these borrowings,” Kubic said.
County chief financial officer Alicia Holland said she and Walls plan to closely monitor the county’s cash flow situation and give regular reports “to help (County Council) understand what we are up against.”
Hilton Head town manager Steve Riley, who met with county leaders this week, said the town is in a similarly challenging situation.
Riley said he doesn’t expect much in the way of FEMA reimbursement until around September.
“We are struggling with cash flow,” he said, and the island is moving forward with it’s own plan to bolster reserves by issuing bonds to the tune of about $18 million.