June 21. OPINION. By Dave Gilroy. Tonight the Cornelius Town Board is expected to approve our annual Town Budget for Fiscal Year 2022. I’ve been looking closely at Cornelius budgets for over 20 years. It’s the reason why I ran for town board for the first time in 2003 – concern about fast growth in government spending. I served for 14 years on the Cornelius Town Board and voted against four major tax increases during that time:
17% in FY 2007
12% in FY 2012 (Embedded in Property Revaluation)
11% in FY 2017
13% in FY 2020 (Embedded in Property Revaluation)
Many people are now asking how I view the FY 2022 Budget. My view is basically the same as last year: Town officials have made a good faith effort, but local government spending continues to grow way faster than our lovely town itself is growing. While our tax rate thankfully stays the same for FY 2022, more tax increases like you see above are inevitable every 3-5 years in Cornelius as long as major departmental spending is permitted to grow at rates triple or quadruple the rate of growth of either our population or property base. The result is unavoidable—your local government will unfortunately require more and more money from your family as time goes on.
Spending vs. growth
I’ll just summarize at a high level this year. It’s really the same old (very old now) story. Overall Cornelius town spending is budgeted to grow 11.8% for FY 22 (this is a fairer number than the 18.0% headline increase for all General Fund Expenditures which includes Debt Service, Capital Transfers, and Solid Waste costs). In contrast, our town population has grown at just 1.6% annually over the last 5 years (this may well increase soon with several new large-scale residential projects unfortunately approved by the Board recently). And the real value of town property has grown at an average of 1.7% per year in the last 10 years (not counting pricing Revals). Of course, the magic of compounding means that over many years, when government spending growth dramatically exceeds the fundamental growth of the town itself, each Cornelius family must bear a much larger share of town government costs over time.
Fundamentals remain the same
Arguably, some of this increase in FY 2022 relates to major Capital spending which varies a lot from year to year and includes road construction and big repairs that we absolutely must have. Nevertheless, recurring core Personnel expenses are budgeted to increase 12% next year and recurring Operating expenses are set to go up over 5%. The rationale and color commentary are a bit different each budget cycle, but the fundamentals remain remarkably the same year after year.
Federal handout
A final note on the fascinating Cornelius budget implications of COVID-19. You will not be surprised to hear that there has been “free money” handed down by the federal government to municipalities nationwide, our lovely town included. Still, the scale of the handout is simply incredible. Cornelius is receiving $8.85 million in two tranches. Half of this total is expected any day and the other half within 1 year. This amount is similar to a whole year of our total Personnel costs just a couple of years ago. And most remarkably, there is utterly no reasonable rationale for this extremely large gift from Washington DC (the “American Rescue Plan”). The simple fact is that Cornelius incurred negligible lost revenue or incremental costs stemming from COVID-19. Sales tax was actually up a whopping 4.8% in FY 2021 (when a year ago we feared it would be way down). The Town spent some money on PPE and Zoom licenses, but these costs ended up way below the other additional funding Cornelius received ($72K from the County under CARES; $10K in FEMA assistance).
Reval coming
So, what are the implications? Well, without a doubt, we should not follow the pattern of past years and use the next County Property Reval to raise taxes on Cornelius families. Sure, there will be federally regulated spending restrictions on this money (TBD over time), but our Town Board must work diligently to ensure Cornelius taxpayers benefit rather than allow the windfall to make fast growth in government spending even easier than ever.
Dave Gilroy comments at a Town Board meeting in 2020
—Dave Gilroy
Gilroy served 14 years on the Cornelius Town Board
