The Guilford County Board of Commissioners met in an afternoon budget work session on Thursday, April 3, to work with County Manager Mike Halford in assembling a new fiscal 2025-2026 budget for the county.
While they did so, the US stock market was crashing and the economic implications of President Donald Trump’s striking tariff policy were becoming clear to the entire world.
Putting together a giant county budget that last year was north of $830 million in all is hard enough; however, in order to do so with any budget integrity, the commissioners must have a pretty good idea of how the economy is going to fare in the coming year.
For one thing, they must have an idea of how much revenue will be coming in during fiscal 2025-2026 – which starts July 1 and runs through June 30 of next year – as well as how much things like supplies, vehicles and construction will cost during that 12-month period.
In the current economic environment of uncertainty, those figures are unknowable and almost unguessable and the commissioners, Halford, and Budget Director Toy Beeninga and his staff are pretty much in an impossible position.
For instance, at the April 3 meeting, Halford had brought in his estimates of how much it would cost the county to buy needed new county vehicles – but he added, as he showed the slide, that, due to the impending tariffs, the prices of those vehicles may shoot up by the time the county buys them.
The same is true for lumber and other materials needed for Guilford County’s construction projects.
And for just about everything else as well.
The board, which will adopt a final budget in June, will also have to consider county revenues, which could take a major hit if the economy goes into a recession as many financial firms are now predicting. Some financial analysts argue that the US is already in a recession.
If the economy slumps, it is very bad for the revenue side of the county budget. The income model the county was basing the entire budget on was constructed on projections made before President Donald Trump announced massive worldwide tariffs. Trump has now paused some tariffs for 90 days; however, base 10 percent tariffs remain and the current tariff on China is astronomical.
Roughly nine of every ten dollars of revenue the county takes in comes from only three sources: property taxes (64 percent), sales taxes (12 percent), and federal and state funds (11 percent). There are other revenues that are generated by investment earnings – and a high return on investments now looks unlikely – and there are also those that come from fees for services such as ambulance transportation or charges to use a park shelter or other facility.
Guilford County Tax Director Ben Chavis must provide his guestimate as to how much tax revenue he will pull in next year and that means deciding how many people will be able and willing to pay their property taxes.
The economy was chugging along nicely when tax and budget officials were making their projections in early 2025. Inflation was coming down, employment numbers looking good and there was a high degree of consumer confidence.
However, if the tariffs do bring a lot of economic pain to the people as Trump has warned, many people who’ve been living paycheck to paycheck won’t be able to afford the sky-high taxes that Guilford County residents pay each year.
The Guilford County Tax Department does an excellent job collecting taxes owed: Every year the department routinely finishes in the top echelon in that regard. However, county tax collectors can’t get blood from a turnip and, if people can’t pay their property taxes or have to go on a payment plan, Guilford County won’t have the money it needs to fund everything included in the budget, and the county could end the year with a shortfall.
Also, if consumer confidence is low and people are being laid off in fiscal 2025-2026, they will not buy as much and sales tax revenues in the county will drop below expectations that were formed and cooked into the books before the tariffs were announced.
In addition, the county relies heavily on Federal money for many of its programs; and Elon Musk and the Trump administration have shown an adamant determination to cut federal spending to the bone. While those cuts will save taxpayer money at the federal level, the effects of those cuts will no doubt show up in county services such as Veterans Services, the Health and Human Services Department, and other county departments with programs funded largely with federal dollars.
For years, Halford has been arguing that Guilford County is very short staffed compared to the vast majority of North Carolina counties, which have more county employees on a per capita basis.
If Trump is right and the tariffs create a new economic golden age, Guilford County government should – at some point in the future – have more money than it knows what to do with.
However, currently, the county commissioners and top staff are making plans for July 1 of this year to June 30 of next year – and, right now, they may as well use a Magic 8 Ball to know what that time period will look like economically.
The answer they get may be, “Reply hazy, try again.”
“Budget integrity” and “guestimates”. Bend over citizens….no grease this year either.
The sensible thing to do would be to cut back spending in case there is a shortfall.
If a surplus results, then great…………………..Unlikely that this path will be followed.
Why does the superintendent of Guilford County Schools get paid substantially more than the Vice President of the United States, the Senate Majority Leader and Speaker of the House? Someone give me a good reason.
DC lobbyists sweeten their ‘deal’ . . . & they have higher living costs in DC.
Technically, we are in a recession – a 20+% drop in the Market.
Recessions are not defined by the stock market. 20% + drop is referred to as a bear market if believe.
A common rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth indicate a recession. However, more complex formulas are also used to determine recessions.
Thanks for this article Scott, well done. The number I fear most is
“property taxes (64 percent)”. If property taxes provide almost 2 out of 3 dollars we’re all in trouble. There is absolutely no way this spendthrift council will consider cutting staff or services, thus reducing the dependence upon property taxes to fund their follies.
Declining populations also is a harbinger of things to come.
Time for a new start with a new council.
I wonder how many millions will be given to the “non profits” in order to reward their friends and buy some votes.
Alot.
Scott Yost, we the citizens request a tell-all story on this.
there should be salary/perk caps on all ‘non-profits.
Scott,
“However, if the tariffs do bring a lot of economic pain to the people as Trump has warned, many people who’ve been living paycheck to paycheck won’t be able to afford the sky-high taxes that Guilford County residents pay each year.”
More and more I am tending be a pessimist, am hunkering down, and preparing for a mid to long term fight on the tariffs. I’m looking for the various American sources for things, although I know it can’t be 100%. I’m also hoping that manufacturers will prominently display that ‘Made in America’ label in order to help. I realize not everything will fall into that category but my attitude ‘is every little bit helps’. Some purchases will be postponed, people I’ve dealt with will be receiving little to no return business from me.
Obviously, one thing that’s going to have a serious impact on the people of Guilford County is going to be the (cough cough) ‘considerations’ and final decisions that will be made by the Board of Commissars (nod to Alan) when they make their final decision on how badly to rape the County taxpayers, primarily the property owners. One thing I, and I’m sure a lot of other taxpayers, would like to see is how much these organizations will (not might, but WILL) be getting of OUR money. Something you might want to publish is the makeup and salaries/wages of the boards and employees of these groups. It’s OUR money, OUR involuntary donations, so we have a right to know.
I’ve said it before and I’ll say it again…Guilford County taxpayers, bend over, grab your ankles, and after every swat sound off with “thank you sir, may I have another”
This is a good idea and I will look into it. Thanks for the idea Patrick.
Scott,
If by chance you do follow thru on this, purchase some good lvl 4 body armor, get a remote starter for your car and hire a food taster.
Just some friendly advice.
Will do.
Start with eliminating social(ist) programs, eliminate all overtime & put all lapsed salaries from vacant positions back in the GD general fund. Those overworked and underpaid will find a real job where they are finally appreciated & the lazy employees who remain will either drive your quality of service further into the crapper, or get on board with the program. Glad I survived this sewer storm long enough to retire. It’s become a pathetic mess where no one is valued or appreciated and money is freely wasted on pointless political agendas. If you think anyone there has the interest of taxpayer on their mind, you’re sadly mistaken. The only thing taxpayers provide is revenue to produce the show. We’re all merely pawns in their amusing little chess match. Until we get back to basics, and make all races non-partisan, the beatings will continue. Democrat or Republican, it’s all the same corrupt mess at the core. Sure, there’s an exception here or there, but stand back and look at the big picture from an objective viewpoint and it becomes crystal clear.
Hand wringing. That’s what we’re paying for? The budget director and other county government officials get paid to make the revenue and expense analysis, develop a budget strategy, and come up with a sound and sensible budget regardless of the conditions. We don’t need to be involved in the rehash of people’s individual job performance problems. We just need to know the decided solution. If these people can’t do the job, let’s replace them with people who can.