The Mount Airy Board of Commissioners received another positive report from the auditing firm Martin Starnes & Associates last week.
Chief among the auditors findings was that the city’s fiscal year-end balance has grown again, this year to $11.9 million.
That the city has been able to grow the fund balance for several years, in the midst of cutting tax rates and reducing spending, is testament to the strong, conservative leadership exhibited by the board.
At the board’s meeting last week Mayor Deborah Cochran went so far as to say the city is a “model for financial stability,” and she is absolutely right. This board, along with the city staff, has managed to put Mount Airy in a financial position that many cities and towns across the state would envy.
Financial authorities seem to offer widespread agreement that local governments should keep a year-end balance that is a certain percentage of the government’s total budget. By all accounts, the city has exceeded that figure, and while this is good, it also gives credence to a suggestion by city resident Paul Eich offered at last week’s board meeting: perhaps it is time for the commissioners to consider another, larger, tax reduction.
Three years ago the board set as one of its top priorities to lower the city tax rate by 10 cents, from 58 cents per $100 of assessed value to 48 cents. In the first fiscal year following the setting of that goal, the board cut the tax rate by 2 cents. The next year there was no tax cut, but this past year tax rates dropped by 4 cents.
That leaves the board 4 cents short of its goal, with two years left on the timetable the commissioners set for achieving this 10-cent drop.
We would suggest now is the time to make the rest of the cut, dropping the tax rates another 4 cents in the next fiscal year.
We understand some residents would like to see a larger cut, given the continued growth of the city’s year-end fund balance. However, there was a time when that fund balance wasn’t so healthy, and it has taken hard work and a deep commitment to conservative spending to raise the balance. The last thing city residents should want is for that balance to begin dropping again each year.
We think cutting the tax rate 4 cents is sufficient for now, and if the city is able to hold the fund balance at present levels afterward, then perhaps additional tax cuts could be considered.