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Clemmons prepares for revenue drop
Spending restraint, not budget cuts, is what manager recommends
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Published: October 30, 2008
Updated: 10/30/2008 12:35 am
An expected decline in tax revenues is forcing the village of Clemmons to tighten its purse strings.
Gary Looper, the village manager, used a portion of Monday's council meeting to warn council members that tax revenues will most likely be down by several thousand dollars because of the sluggish economy.
Looper could not give precise figures on the projected budget shortfall because the state will not distribute revenue for a few months. Those revenues are generated from such things as sales tax, property tax and the alcoholic-beverage tax.
"A number of towns are talking about budget cuts right now, including Winston-Salem, based on lagging receipts from revenue sources," Looper told the council. "We're not going to recommend budget cuts, but we are recommending restraints on spending."
Looper presented a chart with possible revenue decreases in six areas that make up $3.7 million of the village's $5.2 million budget. Those areas included property tax, sales tax, ABC tax, beer tax and earnings from interest. Looper outlined a "what if" scenario that involved a 1 percent drop in property-tax revenues. In that scenario, the village could see a budget shortfall of more than $92,000.
He said he doesn't expect property taxes to decline by 1 percent, but he said after the meeting that the village needs to be in good fiscal shape should economic conditions continue to deteriorate. Looper said he does expect earnings from interest and receipts from sales tax to be less than projected.
To offset such a loss, the council authorized Looper to implement belt-tightening measures. Several projects will be delayed, including the purchase of an $11,900 copier and moving a fence at the public-works building that will cost $10,000.
Looper said after the meeting that expenses will be more closely scrutinized. For example, Looper said he recently turned down a request to buy $700 worth of spring-time plants for landscaped right of ways.
"We'll hold off on that until spring," he said.
Purchases of more than $50 must now be authorized by Ann Stroud, the village's finance offer. In normal times, Stroud would approve purchases of about $200 and above, Looper said.
The council also asked Looper to look into how it should expand its tax base. Clemmons gets much of its tax revenue from the property taxes of residents. But it is in the beginning stages of a comprehensive plan that may include some high-dollar expenditures, such as greenways and a community center, depending on how the community responds.
Al Harbury urged his fellow council members to look beyond the current economic condition and into the future. He asked them to consider lifting the property-tax cap, which is at 15 cents of $100 of assessed value.
"I expressly do not expect taxes to be raised during a time of recession," Harbury said after the meeting. "This is not the time to shut our minds to the future and put our head in the sand."
At 10 cents of $100 of assessed value, Clemmons has one of the lowest property-tax rates in the county, he said.
Several of the council members said they thought it was premature to talk about raising taxes, and the discussion was tabled.
■ Lisa O'Donnell can be reached at 727-7420 or at lo'donnell@wsjournal.com.
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