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Horry County nods to 1 percent pay cuts

The Horry County Council approved a preliminary 2010-2011 budget Thursday that won't include a property tax increase, but does include a 1 percent pay cut for all employees.

The council discussed a list of possible cuts that could be made to make up for a shrinking tax revenue stream during the first portion of the council's spring budget retreat in Little River. The salary cut would save about $900,000 in the budget and amount to about $400 a year in cuts to the average employee, staff said. The pay cuts would be part of a larger plan that includes about $8.5 million in expenditure cuts to make up for another year of expected lower tax revenues.

County budget director Westley Sawyer said the cut would mean no employees would lose their jobs. Several council members said they had reservations about the cut because a cost of living increase for employees has been cut from the budget for the past two years and a step program for employee advancement was suspended.

"I have a real problem with the 1 percent cut. I know individually it's not a lot and it means a lot to the county, but when was the last time the employees got a cost of living increase?" asked Councilman Bob Grabowski. He asked if one-time money was available to help employees this year.

Other council members said the cut would mean no one was losing their jobs and it would be better to shoulder now than to use one-time money and have to cut a larger amount in later years.

The county's three division directors were able to make up more than $6 million of shortfalls in the current budget by holding most vacant positions empty and cutting operations by about $4 million. Sawyer said the county should come in about $9.6 million under budget on expenditures for this year, allowing about $3.6 million to be used for another expected shortfall in fiscal year 2012.

For fiscal year 2011, the county is facing about $8.5 million in cuts to the general fund budget including the 1 percent salary cut. Other proposed cuts include eliminating the $240,000 in council members' recreation funds that they distribute to programs throughout the year as need arises.

The preliminary budget would not fund a staffing increase for the North Myrtle Beach library expansion expected to open later this year, and it cuts about $385,000 from the county library system's budget. The Coast Regional Transportation Authority also would lose the $500,000 in funding it received last year, which was down from the $700,000 the agency received in fiscal year 2009. Roadside cleanup and staffing at the county museum, court security and the sex offender registry were unfunded.

"I know that if we don't find a half million or so to fund Coast, then neither will the other municipalities," said Council Chairwoman Liz Gilland. "If we do away with our buses, that's 74 employees that will go home. It's the aged, infirm and the poor that will be hurt, and I don't know how many jobs that will be. ... I will find the funding, but I need cooperation from the rest of you when I do."

The council briefly discussed calling for a referendum in November to raise a dedicated millage for The Coast RTA but tabled the discussion until a future budget workshop.

Sawyer and Administration Division Director Anne Wright said the county is expecting tight budgets for the next three fiscal years. The projections are made worse by a looming property tax reassessment that will go into effect next year. The state mandated reassessment takes place every five years and this year will adjust property tax values from the December 31, 2003, level to the December 31, 2008, level.

The reassessment is complicated this year by Act 388 and a 15 percent cap in assessment increases. It's further complicated by an increase in the number of people who have appealed their tax bills this year. County Assessor Rendell Mincey said that about 11,800 property owners appealed their assessments and of the 60 percent of those appeals that have been addressed, the county has refunded about 24 percent of that tax revenue. Mincey said more developers are applying for an empty property exemption and more people are applying for primary residence status, which would lower their tax rate from 6 percent to 4 percent.

The staff requested that the council not include a projected millage rate in the preliminary budget because so many appeals remain, causing a delay in the assessment projections. If the total assessed value of homes increases in the county, according to state law, the council must reduce the millage rate to make sure that the county is not collecting more money in property taxes than the previous year. The remaining appeals likely will affect that roll back number. If council were to raise the property tax rate this year because of the state formula, it would only be allowed to raise the rate by 0.8 mills.

The council will discuss a larger economic outlook for the county during the budget retreat today. Council members also will hold a closed session to discuss contract negotiations for the permanent administrator position. A budget workshop was scheduled for May 20 before the second reading of the budget, which is scheduled to take place on June 1.

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