On Thursday, Feb. 4, the Guilford County Board of Commissioners will hold a special meeting in High Point – something the board tries to do once a year since it’s the county’s second-largest city – and they’ll be doing so just after reaching an important milestone in the county’s fiscal calendar.

The end of December marked the halfway point of the county’s fiscal year, which began July 1, and county budget staff have now released their formal midyear Budget Performance Report.

Taken together, the numbers amount to a midterm report card of how Guilford County’s finances are holding up six months into a nearly $857 million budget.

The short version is that revenues and expenses are generally tracking as expected, property taxes are performing solidly, sales tax growth is modest but positive, and spending remains below 50 percent in most major categories.

At the same time, staffing vacancies remain unusually high, and staff are already signaling that some use of fund balance (read: its savings account) is likely necessary by year’s end.

In other words, the county is stable – but not without some pressure points that will matter a lot when commissioners begin shaping next year’s budget.

Property tax remains the backbone of Guilford County’s finances, accounting for more than 60 percent of General Fund revenue. As of late January, the county had collected about 81 percent of its budgeted property tax revenue – roughly $438 million of the $542 million projected for the year.

That collection rate is right in line with prior years and is slightly ahead of where the county was at the same point last year, according to staff.

That’s an important signal of stability, particularly given ongoing concerns about affordability, reappraisal-related anxiety and broader economic uncertainty.

Sales tax – the county’s second-largest unrestricted revenue source – tells a more nuanced story: Sales tax accounts for about 13 percent of General Fund revenue, and because of the way sales tax is reported and lagged by the state, only about three months of fiscal year 2025-2026 sales tax activity has actually been received and recorded so far.

Even so, those early numbers matter: Through December, Guilford County had collected about $23.4 million in sales tax revenue – or roughly 23 percent of the $102.75 million budgeted for the year. After adjusting for refunds, sales tax revenue is trending slightly higher than last year, with a projected growth of about 1.65 percent.

That’s not wonderful booming growth, but it is some growth nonetheless – and it comes after two years in which taxable sales in the county largely flattened out.

In fiscal year 2023-2024 and 2024-2025, total sales and purchases mirrored each other closely, with little real expansion. Fiscal year 2025- 2026 is now edging above that plateau.

For commissioners, that modest uptick matters. Sales tax is one of the clearest indicators of consumer activity and local economic health – and even small increases can help offset rising personnel and service costs elsewhere in the budget.

Federal and state revenues – which support public health, social services, and other mandated programs – are tracking at about 28 percent of budget, right where staff expected them to be at this point.

Those funds are being monitored closely because of uncertainty around federal budget decisions and potential coming legislative changes out of Raleigh and Washington.

User fees and other miscellaneous revenues are also largely on pace, with user charges at about 48 percent collected and other revenues at roughly 62 percent.

Overall, total General Fund revenues for the county excluding fund balance stand at about 62 percent collected at midyear, a solid position given how revenue flows unevenly through the year.

On the spending side, Guilford County has used about 41 percent of its total General Fund budget halfway through the year. That’s slightly below a straight-line projection and reflects a combination of staggered hiring and persistent vacancies.

Personnel costs, which make up about 36 percent of Guilford County’s budget, are at about 47 percent spent. Operating expenses are at about 39 percent, while education funding – primarily transfers to Guilford County Schools and Guilford Technical Community College – sits at about 43 percent.

Human services assistance spending is at roughly 31 percent, while capital outlay is only about 15 percent spent so far.

One of the biggest factors holding down expenditures is the county’s vacancy rate: Guilford County currently has 349 vacant full-time positions, or about 11 percent of its total authorized workforce.

County staff have emphasized to the commissioners in recent months that many new positions approved in the fiscal 2025-2026 budget were intentionally given staggered start dates, meaning personnel costs will ramp up later in the fiscal year.

 That suggests spending will accelerate in the spring, particularly if departments succeed in filling hard-to-recruit positions.

Still, the vacancy rate remains higher than in recent years, and commissioners are likely to ask whether those vacancies are temporary, structural, or a sign that Guilford County is struggling to compete in a tight labor market.

Overtime spending is also being monitored closely, especially in public safety and human services departments where vacancies can translate directly into higher overtime costs.  The Sheriff’s Office, for instance, is notorious for massive overtime pay in recent years.

Like all local governments in North Carolina, Guilford County must adopt a balanced budget. For fiscal year 2025- 2026, the county appropriated about $39.8 million from fund balance – essentially its savings account – to close the gap between revenues and expenditures on paper.

At midyear, staff anticipate that some use of fund balance will be necessary, based on early indicators.

 However, they also note that fund balance use is often lower than initially budgeted if revenues exceed projections, or if spending comes in under estimates.

Historically, Guilford County has often recovered some or all of its budgeted fund balance by fiscal year’s end, thanks to conservative forecasting and careful expense management. Whether that happens again this year will depend heavily on how quickly vacancies are filled and whether sales tax growth continues through the spring.

Beyond the General Fund, Guilford County’s fire service districts – funded by separate district property taxes – are generally in good shape. Collectively, fire districts have spent about 76 percent of their budgets. That’s typical given the timing of equipment purchases and contractual payments.

Staff reports that revenues in those districts are on track to hit targets, and county officials continue to meet monthly with fire chiefs to monitor conditions.

Other funds, including internal service funds for health care and risk management, as well as opioid settlement funds and tourism occupancy taxes, are also largely tracking as expected so far, though those funds are more restricted and less flexible than the money in the General Fund.

At the halfway point of FY 2026, Guilford County’s finances look steady rather than spectacular: Revenues are meeting expectations, sales tax is inching upward, spending is controlled, and reserves remain healthy.

But the second half of the year will bring much tougher questions – about staffing, service levels, education funding, and how much risk commissioners are willing to tolerate as they head into the next budget cycle.

 This Democratic-majority board has been a risk on board for years, but in the last couple of years some of the discussion has helped them learn, as the money runs out, that money doesn’t grow on magical money trees.  The scary thing is that just when they started to feel real world money shortages, they seem to think they can saved by a massive new influx of property tax revaluations after the 2026 revaluation tax values come out.

If they leave the tax rate the same or near the same – as they did during the last revaluation – they could be pulling in over more than a $100 million dollars extra dollars to play with and can go back to never having any hard financial choices.  That may be why they are amazingly now planning a host of massive capital projects that will cost well over a half a billion dollars all while trying to pay off more than $3 billion in school bond debt.

When commissioners gather in High Point this week, they won’t be asked to take any formal action on the budget report. That will come in a few months,  Still, the numbers provide a clear snapshot of where the county stands – and presents a preview of the funding debates to come.

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