Financial impacts to Buncombe County’s budget from Tropical Storm Helene are beginning to come into focus, and the outlook isn’t sunny.
About seven months into the fiscal year, which ends June 30, county leadership is projecting revenues will be anywhere from $15.1 million to $25.7 million less than projected for the $440 million general fund.
To balance the budget, county staff proposes 4% cuts in most departments and a 4% cut in K-12 education.
In slide after slide of a presentation at a joint meeting with the Buncombe County Board of Commissioners, Buncombe County Board of Education and Asheville City Board of Education on Jan. 16, county budget staff outlined $17.6 million in cuts across most departments.
County Manager Avril Pinder already imposed a hiring freeze across all departments except for 911 services, resulting in about $2 million in salary savings for 89 vacancies. Combined with a hiring freeze of noncertified personnel in the Buncombe County Sheriff’s Office and reduced hours at Buncombe County libraries, Budget Director John Hudson said the county can save a total of $4.2 million in salaries and benefits, the county’s largest spending category. No filled positions will be eliminated in the proposal, confirmed county spokesperson Lillian Govus.
Hudson also proposed $5.1 million in savings by deferring scheduled maintenance of county facilities and energy efficiency upgrades, deferring Information Technology infrastructure upgrades, cuts at the animal shelter and reductions in library programming.
Hudson found an additional $2.5 million in savings by trimming programs or services in public health, social work services, justice services, economic development and economic services.
Another $1 million in savings comes from the delayed 2025 tax reappraisal, curtailing conservation easements and cutting early childhood education.
Hudson stressed the need to make reductions “sooner rather than later” as spending continues with about five months left in the fiscal year.
The county’s projected revenue losses come primarily in four areas, reported county budget analyst Jay Shih: high unemployment, which could mean many can’t afford to pay property taxes, a sharp decline in permits for new single-family home construction, a drop in occupancy tax receipts and falling sales tax receipts.
In October, Buncombe’s unemployment rate spiked to 10.4%, the highest in the state after being the lowest in the state just a month earlier. With more than 10,600 residents unemployed as of November and 331 structures damaged or destroyed, the county’s largest revenue source — property taxes— is projected to be down 2.5%, Hudson said.
Sales taxes, initially predicted to see a modest increase in fiscal year 2024-25, are now projected to be down between $3.5 million and $7.5 million. Hudson also predicts up to $3.2 million less in intergovernmental revenue, a loss of up to $4.5 million from services such as planning and parking and almost $4 million in other losses.
The county’s savings account, known as its fund balance, was used last fiscal year to balance the budget for the first time in more than 20 years, Hudson said.
This year, staff predicts pulling about $16 million, which would drop the county below its goal of maintaining over 15% of its budget in reserves, which could affect its AAA bond rating, said Chief Financial Officer Melissa Moore. That downgrade in credit rating could impact the amount of interest the county is charged when it borrows money.
“Protecting your triple A rating and maintaining unbalanced finance policies is very important in continuing to ensure that we’re able to leverage the lowest cost of capital available,” Moore said.
Outside assistance won’t be here in time
As for help from state and federal governments, much of the money available is restricted for specific uses and not available to run county governments, said Assistant County Manager Tim Love,
“We haven’t seen what you may refer to as maybe revenue replacement, which is one of the major things that we’ve been exploring in our advocacy,” he said.
The bottom line is it’s going to take time for whatever state and federal funding the county might get to arrive. For example, the Federal Emergency Management Agency provides reimbursement, meaning the county has to document its outlays in order to request funds with “no guarantee that 100% of the things we request from FEMA will be reimbursable,” Love noted.
“We’re hopeful more funding will come, but funds are not here today. We have to plan with what we have in hand today. Hope is not a strategy,” Love said.
Education details
As for the schools, the collective $4.7 million in cuts means the districts will have to scramble to balance their books just as they start building a budget for next fiscal year.
If commissioners approve the proposal at a board meeting Tuesday, Jan. 21, ACS will face about $718,000 in cuts while BCS will have to find more than $3.9 million in savings.
“ACS anticipated a budgetary impact from Helene, just not so soon,” said ACS Superintendent Maggie Fehrman in an email to Xpress. “Our finance team is reviewing our current budget, and the proposed reduction to see how we can adjust the budget with as little impact to current operations as possible. At this time, we do not anticipate having to eliminate any staffing positions for the current school year.”
BCS Superintendent Rob Jackson was similarly optimistic about avoiding staff cuts.
“We will mitigate any potential cut from directly affecting classroom instruction. I do not anticipate any job loss,” he said in an email to Xpress. “We realize our community continues to feel the ripple effects from Helene, and understand our county leaders have to consider a measure they’d rather not consider. As always, Buncombe County Schools prioritizes our students and student-facing services.”
District superintendents will have an opportunity to explain what the cuts will mean for schools before commissioners vote on the cuts at the Jan. 21 meeting.
This story was supported by the Fund for Investigative Reporting and Editing.
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