NCCo officials project $8.4 million surplus
New Castle County officials project an $8.4 million surplus by the end of the fiscal year, a huge financial turnaround in a year that was expected to end with a $2 million shortfall.
The news of the expected surplus comes as County Executive Tom Gordon prepares to deliver his budget address Tuesday night for the 2015 fiscal year. The new proposal calls for spending 2.3-percent more, and does not include a tax increase, Gordon said.
Gordon said he's not overly excited about the news that the county will end its fiscal year with more money than expected.
"It's a surplus, which is good, but it comes with an asterisk," he said. "It's not a strong economic comeback yet. We're going to be very cautious before we propose any budget increases."
The current $167.4 million operating budget took effect July 1 and ends June 30. Officials expected the year would end with $2 million less in revenues than expenses, county Chief Administrative Officer David Grimaldi said. But the latest projections show that the revenues will be up by $5.7 million, while expenses should be $2.7 less than anticipated. That amounts to an $8.4 million surplus.
The bulk of the new revenue expected comes from $5.5 million more the county is projected to receive from real estate transfer taxes, county accounting and fiscal manager Ed Milowicki said.
The transfer tax, a 3-percent levy on all real estate sales, is split between the state and local government where the property is located.
The county expects to get $23.5 million from the transfer tax this year, which would be the highest since 2008, when $32 million was received. From 2009 to 2013, the revenue from the tax averaged about $17.3 million a year, according to county budget records.
The transfer tax is the county government's second largest income source. The largest is the property tax.
Grimaldi said he's confident the surplus projections are sound and noted that millions have been taken from reserves in the past eight years to balance the operating budget.
"This financial turnaround give us an opportunity to put money back into the bank for once," he said.
About $1 million of the savings in expenses came from not filling vacant positions, Gordon said. The county has 1,562 budgeted full-time positions. About 100 of them are vacant. There are about 600 part-time employees, many of them seasonal.
Gordon said he can't promise that he'll hold the line on hires for much longer. He declined to give details, saying some would be provided in his budget address.
"We held back on a lot of positions, but some of them we're going to have to fill," he said.
County Councilman George Smiley, who battled with the Gordon administration a year ago over the budget, said he expects the proposal for the next fiscal year to be more prudent. Smiley was part of a faction on council that unsuccessfully tried to reduce the budget by nearly $4 million.
"As the year went on, the administration reduced some spending on feel-good programs and held off on some infrastructure improvements," Smiley said. "It appears they have gotten a grasp on the fact that these are not the economic times of the county executive's prior eight years in office."
Gordon was county executive from 1997 to 2004. He took office again in November 2012.
Councilwoman Janet Kilpatrick said she hopes the budget projections for the current fiscal year prove to be accurate on June 30. She also said she hopes Gordon's new budget doesn't propose new spending based on this year's projections.
"The news of a potential surplus is good and it's a trend I hope continues," Kilpatrick said. "But in the past, we've seen figures that have gone down after they've gone up. You can't spend something until the money's actually in your hand."
Contact Adam Taylor at (302) 324-2787 or ataylor@delawareonline.com.