This week, the Collin County commissioners court conducted the first of two public hearings on the FY 2014 tax rate. The second public hearing on the tax rate will be held on Monday, September 9 at 6:00pm in the McKinney city council chambers (222 North Tennessee Street, McKinney). We will also hold a public hearing on the FY 2014 county budget on Monday, September 16 at 1:30pm in the commissioners courtroom (2300 Bloomdale Road, McKinney). I encourage all citizens who are interested in the direction, leadership, and financial management of Collin County to join us or watch online.
One of the more interesting topics from our conversation this week related to the proper treatment of our general fund surplus. We are extremely blessed in Collin County to have a strong financial report card and a healthy general fund surplus. In fact, to give you a better sense of our financial position, consider this:
- In order to fund normal county operations, it typically requires a general fund surplus equivalent to 90 days of operations. This provides the necessary working capital during the first months of the fiscal year while we wait to receive property tax payments.
- Beyond the minimum requirements, best practices call for a slightly larger general fund surplus of between 120 and 150 days.
- Bond rating agencies routinely advise that they prefer to see at least 180 days of general fund surplus before they award a AAA bond rating. Collin County is blessed to be one of only a handful of Texas counties with this exceptional rating.
- Exceeding all of these guidelines and recommendations, Collin County closed fiscal year 2012 with a general fund surplus of 318 days, and is currently on pace to close fiscal year 2013 with a general fund surplus of 306 days!
- Neither the 2012 nor 2013 figures take into account over $13,000,000 that we have set aside in the general fund surplus for specific future emergencies (e.g., natural disaster, special elections, etc.) If we were to take into account those additional funds, the general fund surplus would increase by 30 more days.
Certainly, it is a blessing to be in this financial situation. As a taxpayer and citizen of Collin County, I’m thankful for the conservative decisions of the past that have allowed us to be here today. Now the decision is how to best plan for the future, and how best to serve the citizens of Collin County with their tax dollars. This will be the focus of our next two public hearings.
The basic question is this: After we have …
- funded county government,
- paid for essential county services,
- set aside surplus funds for future infrastructure expenditures,
- set aside surplus funds for specific future emergencies, and
- set aside additional surplus funds for future operations,
… and we still have more taxpayer money than we need, what should we do?
In our meeting this week, I presented a proposal that would do just that. I believe a tax rate cut is in order this year, and I will advocate for that position in our next two public hearings.
To be sure, there are alternatives, and some may be suggested in our discussions. We could always look for more ways to spend your money. There are always more programs we could launch and services we could fund. And to be sure, a small tax rate cut would not amount to significant savings to the average family in Collin County. But regardless, we must be intentional if we are to keep government limited, and we must always remember that we are spending your money. I believe you are best equipped to decide how to spend your money.