An exchange at the Tuesday, Feb. 7 City Council meeting between Mayor Nancy Vaughan and Assistant City Manager Larry Davis didn’t make much sense, unless you consider what was left unsaid.
Vaughan is the lone member of the current City Council who voted against the 2022-2023 budget, which included a 30 percent property tax increase. Councilmember Zack Matheny was not on the City Council at the time and the other seven councilmembers all voted for the largest tax increase in the history of Greensboro.
The exchange was about a mundane agenda item, “Resolution to Re-Affirm City Council Action for Fund Balance Improvement Plan.”
In 2022, the Greensboro City Council got in trouble with the Local Government Commission because the city’s unallocated fund balance, or emergency fund, was $9 million short of the 25 percent minimum recommended by the Local Government Commission.
The Local Government Commission insisted on Greensboro having a definite plan to bring the fund balance up to the recommended minimum and the City Council complied with a plan to bring the city into compliance in five to seven years.
The problem is that the fund balance in 2022 went from 22 percent to 18 percent, which is the wrong direction.
When the fund balance resolution came up for discussion Vaughan said, “By passing the tax increase we made that fund balance bigger. We actually have to put in more money now.”
Davis was noncommittal and said, “We’re working on a mid-year projection that will get into more of those details.”
Vaughan again asked if the “large increase in property tax” wasn’t going to increase the amount the city was required to keep in its fund balance.
Davis agreed that a new calculation was required, but that the staff still thought the city could reach the required minimum in five to seven years.
Vaughan was not willing to give up and said, “My question is, what impact did that vote to increase property taxes have. How did that impact the amount that we owe?”
She added that her assumption was it would be “a whole lot more” because the property tax increase put an additional $45 million in the budget.
Vaughan finally said, “I’m looking at raising taxes and all the unintended consequences.”