New Hanover County leaders talk school funding, budget challenges. Here are the highlights.

New Hanover County officials are beginning to look at budgeting priorities for fiscal year 2024-25. A lengthy look was taken Monday at top-line revenue expenditures, which included school funding, property tax and sales tax.

Here's a look at some of the highlights:

Schools

The county’s budget work session came just after the New Hanover County Board of Education’s announcement of anticipated cuts to the county school system.

“The conversation about a budget right now for me is a bit premature," said Commissioner Jonathan Barfield. "For the last many years, this board has increased our allocation per student. … We can allocate resources to the school board, but we have no jurisdiction over how they spend those dollars. Once the school board refines what they need, they’ll make a formal request to our board.”

Among the 100 counties in North Carolina, New Hanover County ranks eighth in its funding rate per student. For fiscal year 2023-24, the county’s contribution to New Hanover County Schools totaled around a third of the total county budget at $140,623,332, with funds going toward school therapists, school resource officers, school nurses and more.

County Manager Chris Coudriet pointed out that while the county is putting funds toward New Hanover County Schools, it is ultimately a state responsibility.

“I think that by far when it comes to having school therapists and school nurses in our schools, I think we should hold to our commitment to make sure our kids are protected on every front -- not just through school resource officers…,” Barfield said.

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Current financial position

Outside of school funding, the county’s chief financial officer, Eric Credle, said that for the 2023-24 fiscal year general fund, the county’s property taxes are tracking slightly higher than budgeted, sales taxes are tracked right on budget and expenditures are in line with the budget.

Currently, the county is seeing low unemployment, decreasing inflation over the past year, a soft landing despite rising interest rates, higher investment income and a growing tax base. However, the county is dealing with some challenges as it’s the final year prior to property tax revaluation.

Challenges

Since the last revaluation in 2021, inflation is up 19.5% through January 2024 and the budgeted property tax revenue is up 0.49% from fiscal years 2022-24, according to the county.

Other headwinds include rising debt, a higher public safety cost and sunsetting funds from the American Rescue Plan (ARP) — which will lead to some employee cuts.

Some of the programs that ARP is sunsetting on include the Mental Health in Schools Expansion, the Film Crew Internship Program, the Too Good for Violence Expansion and Community Resource Coordinators.

County staff suggested that the remaining $3.2 million in ARP funding be used to carry forward some of the programs that are projected to end in June of this year, along with funding Pre-K expansion. There are still details to be worked out regarding where alternative revenue sources will come from if the board decides to continue to fund the programs after ARP funding is exhausted.

Property and sales tax

Based off of the county’s property tax rate history, county staff projects that next year’s rate will either remain the same at 45 cents per $100 of valuation or something higher based on expenditures. According to the county, the estimated property tax budget is $51,735,136,768 with $5.2 million in additional revenue.

For now, it’s anticipated that fiscal year 2025’s sales tax estimate is $117.4 million with an additional revenue of $1.2 million.

What’s next?

The county’s next scheduled budget work session is on March 14 and the official budget adoption on June 17.

This article originally appeared on Wilmington StarNews: New Hanover County leaders look budget priorities for new fiscal year