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Finance director explains 'cap bank' resolution as recurring budget tool; details on eligible amounts
Summary
Director Taylor told commissioners the cap bank is a financial-management mechanism counties use annually to bank unused tax-levy capacity; Taylor said Union County is eligible to bank roughly $14 million under a 1977 cap and $24 million under a 2010 test, and that the bank must be adopted annually.
Director Taylor of the Department of Finance explained a proposed resolution to establish a cap bank, a routine financial-management tool counties use to preserve unused tax-levy capacity.
Taylor said the county must compare two different statutory tax-levy tests (a 1977 cap and a 2010 test) and may bank the difference. "Between the 1977 and the 2010, we are actually banking and we are eligible to bank roughly $14,000,000 under the 1977 and 24,000,000 under the 2010," Taylor said. He added the bank is not cash but an accounting mechanism to access additional levy capacity in extraordinary circumstances.
Taylor said the board must adopt the resolution each year when the budget is introduced. When asked whether any money actually rolls over as hard dollars, Taylor reiterated "It is a bank. It is not actual hard dollars. Again, it's just a financial management tool." He said the county had not used the cap bank in about 10 years.
Ending: The director said the measure is a recurring budgetary resolution; commissioners indicated understanding and no further questions were recorded at the agenda-setting session.
