By Paul Gable
Horry County employees have not had a raise in the past three budget years, but that could change in the upcoming year. A majority of council members currently seem inclined to include an employee pay raise in the FY 2013 budget.
The county has weathered three difficult budget years and is currently running an approximately $9 million surplus in this year’s budget. It’s not that revenues are making a real comeback, it’s more that county government has significantly cut expenses over the past three years.
Much of the blame for local budget shortfall in the past three years can be laid at the feet of the state General Assembly. When Act 388 was passed in 2006, eliminating owner occupied homes from property taxes that funded school operating budgets, the state raised the sales tax one penny, promising to fund school operating costs from the state budget.
Almost immediately, state sales tax revenue dropped causing a significant budget shortfall at the state level. While school funding is not part of the county budget, one step taken to close the gap between revenue and expenses at the state level, by the General Assembly, was to reduce the amount of money put into the local government fund. The fund returns to local governments a percentage of the tax revenue collected at the local level, but sent to the state each year.
The General Assembly’s Act 388 not only cut revenue available to Horry County Schools, it also cut revenue available to Horry County Government. Last year, the cut to county government amounted to approximately $5.5 million.
Nevertheless, Horry County was able to weather this cut in revenue, add $3 million in new spending ($1.8 million to the economic development corporation and $1.2 million to COAST regional transit authority) and still reach the point of a projected $9 million surplus at the end of this budget year (June 30, 2012).
A significant portion of county budget cuts have come at the expense of county employees. In addition to no raises for the past three budget years, the county has cut employee positions approximately 10 percent. The cut in positions was attained through employee attrition. No employees have been laid off or terminated to cut payroll, yet many have been asked to pick up additional duties, as the absolute number of county employees dropped, while receiving no pay raise.
Council members now seem inclined to raise employee pay in next year’s budget, barring some unexpected new budget crunch in the coming months. No specific percentage is being discussed at this point. Such considerations will become known when council holds its spring budget retreat in late April, but the employee pay freeze could be over.