Happy Thursday evening, Floyd Forum readers! I spent my day watching about three hours of video from the Floyd County Board of Supervisors’ first budget work session of the 2022 Fiscal Year. In tonight’s edition, I have some of the highlights from their discussion.
Public officials always urge reporters to be careful when writing about budget negotiations, so I’ll include a disclaimer. Supervisors will discuss a variety of budget alternatives during these talks, which will continue through the spring. None of the decisions they make are necessarily final, nor are they binding until the Board approves a final budget in July. However, I do think it’s important for folks (reporters and others) to pay attention to the decision-making process as it progresses—so they can offer feedback on various alternatives! (The public will also have a chance to comment during a public hearing near the end of the process.)
Tomorrow, I’ll have coverage of today’s Floyd Town Council meeting, as well as potentially a bit on tonight’s called meeting of the Floyd Economic Development Authority. Stay tuned, and thanks for being here!
-Ashley
Supervisors discuss potential cigarette tax to mitigate pay raises, capital projects
Assistant County Administrator Cindy Ryan launched Wednesday morning’s discussion of Floyd’s FY22 budget by discussing potential revenues. A third of the county’s revenue, Ryan pointed out, comes from personal property and real estate taxes imposed on residents. Supervisors are in the midst of figuring out the extent to which they’ll need to raise those taxes in the next year to cover several capital projects.
The county collects other revenues from:
Recreation fees. Ryan said Parks and Recreation Director Jacob Agee projected those fees at $45,000 for FY 21 (which ends June 30), and “we haven’t gotten anywhere near that.” Agee lowered his projection for next year’s budget, but Ryan still found it very optimistic, so she urged Supervisors to revisit that number in future work sessions.
Court fees and fines. These revenues are also “way down” from a typical year, Ryan told the Board, because most court sessions have not been held this year due to the pandemic.
Local sales tax. On this front, Ryan said the county is on track to outperform its projections. “Local sales taxes did a lot better than we expected. That’s fabulous news,” Ryan said. Sales taxes remained steady through the pandemic both because people prioritized supporting local businesses, Ryan said, but also because the county gets a share of taxes collected during online shopping at Floyd-based stores. With the support of the county EDA and Tourism Department, lots of Floyd businesses launched websites and online shopping platforms this year.
Meals taxes, which go into a designated fund for capital projects.
The county is facing $8 million in upcoming capital projects, in addition to its recent $14.5 million outlay for the Collaboration & Career Development Center at Floyd County High School. Those expenses, combined with mandatory pay raises due to a state law increasing the minimum wage, mean the county has higher-than-average expected expenditures for FY 22. Courthouse District Supervisor Jerry Boothe pointed out that there is one potential revenue stream the county has yet to leverage.
State law authorizes localities to impose a tax on cigarettes, an ability Floyd County has not yet used. A “stamping agent” labels cigarette packs liable for the tax, and then is responsible for collecting the tax and distributing it to one or several localities, plus the state. In the past, Supervisors have discussed taking a regional approach to a cigarette tax. That is to say, having a centralized “stamping agent” for cigarettes sold in New River Valley counties, for instance, and then distributing the collected taxes between the counties. That raises some questions about whether profits would be distributed based on total population in a county, total sales or some other metric.
“I’m a tobacco user...I choose to do that,” Boothe told his fellow Supervisors on Wednesday. “I look at this a little different than (normal taxes). It’s kind of like a meals tax. If I choose to eat out, I know there’s going to be a tax,” he said. Boothe ventured that the county may be able to shave one cent off its potential property tax rate increase based on cigarette taxes. The maximum amount a carton of cigarettes can be taxed is 40 cents, Boothe said.
Indian Valley District Supervisor agreed with Boothe and said, “I would have a hard time not looking into it” since the county levied the meals tax. Coleman said it’s an issue of equity, because people’s personal choices about leisure (eating at restaurants and smoking, e.g.) should be taxed equally.
Supervisors’ discussion of potential cigarette taxes led into a discussion about taxing marijuana, which is moving toward legalization in Virginia. Locust Grove District Supervisor Lauren Yoder said Floyd County has good prospects for the marijuana industry. “I was reading that economically-challenged areas have a higher chance of getting a permit for growing and selling,” he said. Coleman said the county should be mindful that with increased revenues will also come increased expenses for the county. He suggested that with increased use of marijuana products, the Department of Emergency Services and the Department of Social Services would face increased costs, although he didn’t specify exactly what those costs would be.
As for expenditures, Ryan delineated several mandates the county would face in its budget next year.
The General Assembly in 2020 authorized step increases over the next six years to a $15 minimum wage. The first increase, to $9.50/hr, takes effect on May 1, 2021. However, Ryan said all county employees are already paid above that rate. On Jan. 1, 2022, the rate will increase again to $11/hr. Five employees at the Jessie Peterman Memorial Library will see raises at that point. The minimum hourly wage will go from $11 to $12 the following January; to $13.50 in January 2025, and finally, to $15 in 2026. Yoder said minimum wage increases create a problem when they start outpacing the pay rates of longtime employees, especially if those employees have achieved specific credentials to do their job. He cited EMS workers and Solid Waste employees with CDL licenses as two examples. He pointed out that Supervisors will likely have to budget not just for the minimum wage increases, but for wage increases for several employees near the bottom of the county’s pay scale, to remedy that situation.
The state has also mandated a 5% pay increase for constitutional officers and their employees, Ryan said. Constitutional officers are those county employees who are elected to their positions—the sheriff, the clerk of court, the treasurer, the commissioner of the revenue, and the commonwealth’s attorney. The state didn’t provide any additional money for this pay increase, so Supervisors will have to cut elsewhere in the budget to fund it.
The consensus among the Board of Supervisors seemed to be that any departmental cuts should be left to department heads, not decided on by elected officials.
Ryan also included in the budget a one-step pay increase for all county employees.
Coleman expressed frustration with the mandated pay increases. He said the county already works diligently to keep a balanced budget while keeping taxes low. County departments start with their leanest, best offer when they make budget requests, he argued. “People bring these budgets and there’s no pork in it—they’re working off scrap,” Coleman said. “Just with the pay increases alone—how are you going to come close to (covering) that?”
Little River District Supervisor Linda Devito Kuchenbuch reiterated her opposition to the level of spending on capital projects, particularly the development project at the school. She said it comes at the expense of other investments in the county, include economic development and the Public Service Authority, which is in desperate need of improvement.
Ryan also made several recommendations to the Board about granting or denying various budget requests. Her draft budget presented Wednesday included these recommendations, but they can be changed. Among them:
The Sheriff’s Office asked for funding for an additional School Resource Officer (SRO), so that the office would have one for each county school. Ryan did not recommend that budget line, saying, “I feel like the push to have SROs everywhere has kind of shifted, so I don’t know if the state funding will continue.” Ryan added, “While I totally agree with Sheriff Craig’s push to have it in there,” if the state neglects to fund the position because of shifting political tides, the county will have to take on full responsibility. Ryan did recommend funding a part-time data entry employee for the office.
The Animal Control department requested that their part-time employee be promoted to a full-time, salaried position, and Ryan did not recommend that, saying she hasn’t heard any feedback from county residents about the department being understaffed.
The Rescue Squad requested full funding for a new ambulance, which Ryan did not include in the budget. She suggested the squad may be eligible for 80-20 grants that could help fund the project.
The county recycling center asked for one additional staff person, which Ryan did not include in the budget, saying the request lacked sufficient justification. Supervisors pointed out, however, that typically trustees would be supporting efforts at the recycling center. Trustees are incarcerated folks from New River Valley Regional Jail who are contracted to work in the jail’s constituent counties. The program has been discontinued for a while, both because of the pandemic and because the jail lacks suitable candidates for work release. This may mean the recycling center has been overburdened.
At Thursday evening’s Floyd Town Council meeting, the town consented to an office building being constructed at the county Recreation Park. This building is planned to be 3,000 square feet, and will include office space, storage for recreational equipment and a garage. It’s at least a $200,000 investment. Supervisors briefly discussed whether any of the space could be reserved for use by the broader community, given the price tag on the project.
The Floyd County Board of Supervisors will hold their next regular meeting on March 9 at 8:30 a.m.