After six special meetings spanning March through June, the Town of Highlands’ $28+ million FY 2019-’20 budget has been finalized and accepted. It will be in effect July 1, 2019 through June 30, 2020.
However, at the June 20 Town Board meeting, Town Manager Josh Ward made a rare announcement. Highlands’s current ad valorem tax rate of 16.40 cents per $100 property valuation will decrease for ’19-’20 to 15.65 cents per $100 valuation; with 1.5 cents of that earmarked for recreation.
No one can remember when, if ever, the tax rate went down even when a “revenue neutral” stance has been taken by the county or the town.
After a general reappraisal of real property is conducted, the NC General Statute 159-11(e) requires government units to publish with the budget a statement of the revenue neutral rate. The revenue neutral property tax rate is the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced by the current tax rate if no reappraisal had occurred.
But Highlands went a step further, “because we could,” said Ward.
The county’s recent reval put Highlands property values at $1.835 billion up $84.283 million from the last reval and last year’s property valuation of $1.751 billion.
To determine the revenue neutral tax rate, a “growth factor,” which is due to improvements since the last general reappraisal, is used to calculate the tax rate based upon the average increase in the tax base.
Since the Town of Highlands average growth rate is calculated at .04%, the revenue neutral tax rate is 15.65 cents per $100 valuation, said Ward.
“We have the money we need, so we can do this,” said Ward.
Commissioners and Mayor Pat Taylor commended Ward and Finance Director Rebecca Shuler for a job well done.
“I want to commend them for their diligence in doing this budget especially for going back and researching to pinpoint the precise formula for the revenue neutral determination. I’m not sure we have been doing that in the past, but I am really gratified that they did it,” said Taylor.
Commissioner John Dotson seconded the mayor’s comments.
“They did yeoman’s work in getting this revenue neutral figure down to what it is. I know in the past we have worked on what we considered to be balanced budget terminology and to my knowledge we have not taken into account reappraisals in our budget and I think being able to do this is above and beyond,” said Dotson.
To provide the revenue needed to balance the water department operational budget over the next several years, the finance committee suggested an increase water/sewer rates.
Effective July 1, 2019, the base rate inside the town limits will increase by $1 from $35 to $36 but to offset this, what is considered “base usage” will increase from 2,500 gallons to 5,000 gallons.
The rates outside town will remain double the town limits rate, and as is the norm, sewer rates will remain 100% of the in-town water rates.
By Kim Lewicki, Highlands Newspaper