Buncombe County sees more than $600 million move through its coffers on an annual basis. But where does it all go? And how do staffers and elected officials make decisions on how to spend it all?
Those important choices are happening right now, as the county determines its budget for the upcoming fiscal year, FY 2025, which runs July 1, 2024 through June 30, 2025.
Financial jargon and the municipal budget-making process can be rather befuddling – so we put together a guide dedicated to understanding taxes, spending and how you can provide input. Have a question we haven’t answered? Email us at lastnight@bpr.org and we may update our guide with new answers.
Breaking down the basics…
How much money is in the annual budget?
The budget changes every year based on revenue from property tax, sales tax, intergovernmental funding, various fees, charges and permits and other miscellaneous sources.
Last year, the county adopted a total budget of around $609.5 million. The budget is expected to be around the same this year, according to county spokesperson Lillian Govus.
How is the money organized?
The county’s finances are organized into four main funds: General, Special Revenue, Enterprise and Internal Service.
- The General Fund: This is the county’s largest bucket of spending on much of its day-to-day operations, such as EMS, public health services and education. General Fund money primarily comes from property tax dollars but operations are also supported by sales tax revenue, investment earnings and intergovernmental funding (like federal or state grants). Last year, the fund totaled $430 million. This year, it’s projected to use $436 million.
- The Special Revenue Fund: This is money restricted by law for certain uses. One example is the approximately $40 million occupancy tax, which passes through Buncombe County government but is ultimately allocated and controlled by the Buncombe County Tourism Development Authority. Last year, the county’s Special Revenue Fund was $119.8 million, or about 20% of the total operating budget.
- The Enterprise Fund: The three services operated through this fund are solid waste, inmate commissary and the Buncombe Sheriff’s Real-Time Intelligence Center. In each case, program revenue or fees directly fund operations. Its budget for last year was $16.3 million. The vast majority of the funds, around $15.7 million, were used for solid waste management.
- The Internal Service Fund: This is another limited-use arrangement, specific to paying for commercial liability programs, plus insurance, dental, workers’ compensation and other benefits for county employees. Buncombe spent around $42.9 million here last year.
Who ultimately decides the budget?
County Manager Avril Pinder is responsible for assembling a proposed budget. The county’s budget department, run by John Hudson, assists the county manager by planning, preparing and monitoring the county’s budget for efficiency and performance.
Once the budget draft is proposed, it goes before the Buncombe County Board of Commissioners for final approval.
What is the timeline of the budget process?
The budget process officially kicks off in November when the county hosts its first budget retreat. At the retreat, the county establishes the cost of delivering basic services and commissioners, along with full-time leaders, decide on new spending.
Then, the county holds work sessions to discuss the direction of the budget. Buncombe has already held two with a third scheduled for May 9, with a focus on education and fire district spending.
At the May 21 commission meeting, Pinder will present the staff’s recommended budget.
There will be a public hearing and vote on June 4, when the council provides feedback on the budget and residents get the opportunity to provide input.
A final vote is scheduled for June 18. According to state law, the budget must be adopted no later than July 1.
What if the county fails to pass a budget by July 1?
The county can still pay salaries, make debt payments and take care of other routine expenses.
Where does the money come from? And where does it go?
How does the county bring in revenue?
The majority of the county’s general fund revenue comes from property tax, intergovernmental funds and sales tax. This year, a total of $416.5 million in revenue is projected to be supported via these major sources:
- $264.9 million in property taxes
- $46.6 million from intergovernmental transfers, i.e. state, federal and other funds
- $24.8 million from sales tax and other services
- $6.7 million from other taxes and licenses
- $5.7 million from permits and fees
- $11 million in interest and investments
What sales tax does the county levy?
The county has four local sales taxes. In total, these represent a 2.25% tax. To learn more about each, start here with an N.C. Department of Revenue quick reference sheet to each article of tax distribution.
- Article 39: A 1% tax that supports the Public School Capital Needs Fund, which allocates money to Buncombe County Schools and Asheville City Schools.
- Article 40: A half-percent tax, 30% of which must be spent for school capital outlay or debt service on school bonds.
- Article 42: A half-percent tax, 60% of which must be spent for school capital outlay or debt service on school bonds.
- Article 46: A quarter-cent tax designated for Asheville-Buncombe Technical Community College.1008
The remaining proceeds from the various taxes can be used by the county for other purposes.
What is the current property tax rate in Buncombe County?
The county taxes property owners at a rate of 49.8 cents per $100 of assessed value. Residents may also face additional taxes, depending on where in the county they live.
How are property taxes determined?
Property value is determined by recent sales and the real estate market. The county uses this to assign appraisal value. State law mandates the county to conduct appraisals at least every eight years but county governments can do it more frequently.
Buncombe typically conducts a property appraisal every four years. The last one was in 2021 – and it’s currently finalizing another appraisal. On Jan. 1, 2025, property owners will receive a new assessed value. Your tax bill comes from the assessed value and the tax rate, set by commissioners.
How and when does the county raise property taxes?
Buncombe County Commissioners have the authority to raise property taxes through the annual budget process. The county last raised taxes in 2023 – increasing the rate by 1 cent – to fund education, according to reporting from Mountain Xpress.
What happens to the money that the county does not spend?
At the end of a fiscal year, any unspent money goes into an unassigned fund balance, which is basically the county’s “savings” account.
It’s best practice to maintain a fund balance equal to 15% of expenditures in the General Fund, according to County Budget Director John Hudson. If the county needs to fund extra expenditures, it can choose to dip into its fund balance, as long as it maintains the required balance.
As of June 2023, the unassigned fund balance totaled $67.1 million, according to county spokesperson Lillian Govus.
Can the county invest any of its extra funds?
Yes. The county currently has an investment portfolio that totals around $336 million, according to Govus.
Does the county get any money from the tourism tax?
Hotels and short-term rentals in Buncombe County are charged a 6% occupancy tax. These funds do pass through the county, but they are ultimately controlled by the Buncombe County Tourism Development Authority. State law requires the authority to spend two-thirds of its annual budget on destination promotion and one-third on tourism-related expenditures.
What are the county’s biggest expenses?
Based on last year’s budget, the county uses 27% of its general fund revenue for education, 22% on health and human services and 21% on public safety.
Is the county allowed to run a deficit budget? What happens if it doesn’t have enough money?
The county cannot run a deficit with its annual budget, according to state law. If the county needs extra money, it can dip into its unassigned fund balance – or cut spending
How much debt can the county legally take on?
County policy allows Buncombe to take on 3% of the total assessed value of taxable property, which would be approx. $1.1 billion in debt.
This is a more restrictive policy than state law, which allows county debt worth 8% of property value within the county, which is approximately $3.6 billion in debt, as of June 2023.
The county has $380.6 million in debt, as of June 2023.
What to expect this year
What are the public input opportunities?
There is no public comment during budget work sessions, but there is at least one required public hearing before the county adopts its proposed budget. That is scheduled for June 18 at 200 College Street, Room 326 in downtown Asheville beginning at 5 p.m. The meeting can also be streamed via Buncombe County’s Facebook page.
The public hearing is scheduled for June 4 at 5 p.m. in the same location.
What are this year’s funding priorities?
At its recent work sessions, county leaders discussed plans to expand emergency services, increase information technology spending and allocate funds to capital projects. Those plans include nearly $5 million for the county’s emergency shelter and $10 million for a new public safety information technology system.
The county also proposed a 4.89% cost of living salary increase for its more than 1,700 employees, along with a plan to add 22 new positions. Nine of those positions would be with the Department of Social Services.
What are the pain points in this year’s budget?
Based on the county’s April 23 work session, the county is facing a $28.5 million gap between its projected revenue and proposed spending. The gap is a result of lagging sales tax revenue and the expiration of some federal funds the county was receiving, including the American Rescue Plan Act.
Hudson, the county’s budget director, said that with no change in property tax – or decrease in spending – the county will run out of its fund balance (a.k.a savings) by FY 2027.
“We have been balancing our budget with the fund balance. We need to get to a point where this is not the case,” he said.
What are the proposed fee changes?
Commissioners are considering new fees from county departments that include Emergency Services, Agriculture and Land, Permits and Inspections and Parks and Recreation. Some of those proposed fees include:
- ABC License Inspections: $100
- Zoning Vested Rights: $100
- Grass Field Rental for a nonprofit, school or government organization: $20 per hour
See a complete list of proposed fee schedule changes.
Can't get enough of municipal number crunching? Check out our guide to the City of Asheville’s budget process.
