Cabarrus County projects $5.8 million FY26 shortfall; staff proposes deferrals and reserve reductions

Roche, the county budget director, told the Cabarrus County Board of Commissioners that preliminary, tentative FY26 projections show a $5.8 million shortfall under the current 57.6¢ property tax rate.

The presentation, labeled by Roche as preliminary and still being vetted, forecast revenues of about $389 million for next year and identified property taxes as the largest revenue source. Roche said updated tax valuations reduced the assumed growth rate from 3% to 2.17%, producing an estimated $275,000,000 in property tax revenue — roughly $5.8 million more than the prior year’s budget but lower than earlier projections.

Why it matters: The county’s five-year outlook shows growing deficits if assumptions hold — $5.8 million in 2026 rising to larger shortfalls in subsequent years — and staff recommended short-term budget moves to avoid raising the tax rate before recommended budgets are finalized.

Roche opened by cautioning that “all figures presented are preliminary and tentative and are still being vetted,” and that numbers will change before a recommended budget is submitted in May. On revenues, Roche said sales tax is projected to increase 1% and intergovernmental revenues (largely social services reimbursements) to rise about $797,000. On the expense side Roche cited personnel costs as the largest driver, with an estimated $55 million increase in salaries and $6.6 million for employee benefits in the continuation budget.

Commissioners pressed staff for details on specific drivers of personnel expense. Roche identified overtime increases in detention and DHS (Department of Human Services) as major contributors and said some overtime in public safety is reimbursable while portions are not: “Of that overtime for allowable services and social services, roughly 50% of it is reimbursable,” a county finance staff member said during the meeting.

To close the FY26 gap without changing the tax rate, Roche proposed a mix of one-time and temporary actions that would together reduce the shortfall by roughly the deficit amount. The main options were: - Defer a payment to the self-insured workers’ compensation fund for one year (about $2.4 million) to use as temporary savings. - Recognize an expected salary lapse (positions that remain vacant for part of the year) as a budgeted negative of about $1.2 million. - Reduce the annual salary study allocation by $1.0 million for one year. - Lower contingency reserves for power/gas and fuel by a combined $350,000. - Reduce the county’s contribution to the Economic Development Commission (EDC) by $250,000 (from $400,000 to $150,000) as a discussion item. - Defer hiring for 4–5 noncritical positions for one year.

Roche described these options as “the things that we came up with, that we thought would be least painful” and urged the board to give guidance on which of the proposals to adopt while staff finalizes revenues and partner requests. Roche also noted an internal audit uncovered duplicated, never-filled positions in the payroll system with a notional value of about $430,000; those entries were removed from consideration.

Board members asked for digital detail on incentive line items and for staff to return with refined numbers after department budget conferences and educational partners’ requests (due April 10). Roche closed the presentation by outlining next steps: department budget conferences in March, presentations from educational partners in April, the county manager’s recommended budget on April 19 and a public hearing in June.

Ending: Roche reiterated the preliminary nature of the forecast and said staff will return with updated figures and options after partner submissions and the department budget conferences. The board scheduled follow-up budget sessions to give commissioners time to weigh those options before a recommended budget is finalized.