Lunenburg supervisors hear FY2020-21 budget that leans on reserves; tax increase flagged for 2021

The Lunenburg County Board of Supervisors on June 11 held a public hearing on the proposed Fiscal Year 2020–21 budget, during which County Administrator Tracy M. Gee said the plan relies on $854,916 from county reserves and $150,000 from the solid waste fund.

Administrator Gee said the proposal leaves an estimated $6.7 million in reserve funds. She told the Board the budgeted local amount for the school system is $3,810,700, which meets the state-required local match, and that the county would absorb a $385,000 school debt-service payment previously charged to the school budget, increasing the county’s use of fund balance.

"This budget uses the largest amount of reserve funds we've used in seven to eight years," Supervisor T. Wayne Hoover said in the discussion, urging caution about repeated reliance on fund balance.

Administrator Gee said she has asked Ted Cole of Davenport to investigate whether interest rates on the county’s bonds can be reduced, and that the Board will need to consider a tax increase in the 2021 calendar year to help reduce future draws on reserves.

The Board unanimously approved entering and then exiting the public hearing; no final budget adoption occurred at the June 11 meeting.

Why it matters: The use of one-time reserves to balance an operating budget can be a short-term remedy that increases pressure to raise taxes or cut services later. The Board flagged a possible tax increase for 2021 to avoid sustained reserve depletion.

What's next: The Board continued routine business and scheduled a continuation of the meeting to June 18, 2020 for further items on the agenda.