Supervisors debate advertising higher tax rate to preserve reserves and contingency in FY27 draft budget

County staff presented the draft FY27 budget and tax-rate options to the Northumberland County Board of Supervisors at the May 7 meeting, prompting a substantive debate about whether to advertise a higher tax rate to protect reserves and maintain contingency funding.

The draft budget presented was $48,878,924 and included a proposed advertised rate of 51¢ with an equalized rate quoted at 0.4721; staff also proposed a 2% salary increase countywide and included updated VRS multipliers and health-insurance assumptions. The finance director explained that past budgets had used undesignated reserves as a source of revenue and that auditors had since required clearer separation of true revenue from reserve draws. As presented, the 51¢ scenario would leave about $769,718 designated to undesignated fund balance but would not provide a separate contingency/rainy-day deposit.

Several supervisors argued for advertising a higher rate (examples discussed were 55–57¢) so the board would have flexibility to increase reserves and create a contingency fund without needing to re-advertise. Finance staff explained the arithmetic: one penny on the levy is roughly $457,000 and advertising a higher rate preserves options to come down later if final cuts are made. Staff agreed to run additional scenarios showing how different advertised rates would affect the undesignated fund balance and called for a work session to review options before the scheduled public hearing.

The board tentatively scheduled further consideration (a work session) and agreed staff should prepare alternative tax-rate scenarios and the impacts on reserve levels so supervisors can decide whether to advertise the higher rate and how much to earmark for contingency or reserves.