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Commissioners Adjust FY25 Expenditures, Navigate Post-Helene Budget Process for FY26
Buncombe County -- January 16, 2025: Buncombe County Government Press Release: In a joint meeting on Jan. 16, the Buncombe County
Board of Commissioners, Asheville City Schools (ACS)
Board of Education, and Buncombe County Schools (BCS) Board of Education began a review of the FY25 budget, which runs through June 30, 2025.
Impacts from the Hurricane Helene disaster brought Buncombe County’s unemployment rates to the state’s highest (10.4%) in October after having been NC’s lowest (2.5%) in September. While that rate has dropped about 3 percentage points since and it’s no longer the highest in the state, unemployment in the County is still over 10,600 as of November.
The storm damaged more than 9,200 Buncombe County residential units, with 331 of those being destroyed and 609 suffering major damage. Since October, single-family new construction permits have dropped around 60% compared to the previous year.
While October is historically one of the strongest months for occupancy tax, which is charged on overnight stays in the County and is an indicator of tourism-related economic activity, during the fiscal year, October 2024 collections were down 74% as compared to the previous year. Overall, occupancy tax collections are down 35% or $5.9 million as compared to FY24 through November 2024.
Revenues from sales tax, which is charged on retail sales and is an indicator of overall economic activity in the County, were also down 7% or $1 million compared to FY24 through October 2024.
Across the board, County revenues through June 30 are projected to be $15-$25 million less than budgeted for FY25.
State and federal disaster relief legislation allows for specific one-time funding mechanisms but does not replace regular recurring revenues.
Because projected revenues are coming in less than budgeted, Buncombe County has enacted a $17.6-million expenditure reduction plan that includes:
Hiring freeze impacting 89 vacancies and non-certified law enforcement resulting in a reduction of $4.2 million
Programmatic reductions across Public Health, Social Work Services, Justice Services, Economic Development and Economic Services resulting in a reduction of $2.5 million
Reductions of $5.1 million of IT infrastructure and software implementation, deferred scheduled maintenance of County facilities, reduction in animal shelter capacity, reduction in library & recreation programming, and other operating adjustments
$1 million of reductions in tax reappraisal funding, future conservation easements, and early childhood education
$4.8 million reduction of local current expense appropriation to school systems and education contracts
NC General Statute 159-13(b)(9) outlines how appropriations may not be reduced after the budget ordinance is adopted unless a general reduction in county expenditures is required because of prevailing economic conditions. Pursuant to that statute, the Board of Commissioners will vote on its decision to reduce education appropriations.
County staff will continue monitoring revenues, identifying savings, limiting expenditures, and adjust accordingly.
FY26 Budget Process
Following the joint meeting, the Buncombe County Board of Commissioners officially started work on its budget for fiscal year 2026 with a retreat identifying budget priorities and balancing those with post-disaster realities. Regardless of circumstances, state law requires a balanced budget, where appropriations match resources.
One of the County’s guiding financial priorities is to keep its fund balance at a level that ensures the highest possible bond rating. A fund balance is traditionally used to cover an unexpected loss of revenue due to emergencies. Fund balances are also a primary metric used by lenders when considering financing rates. Buncombe County is looking to keep its current AAA rating, which is essential to keeping the cost of borrowing money at a minimum so the County can leverage debt for capital programs.
FY26 revenue drivers and projections
Buncombe County’s largest revenue sources are:
Property tax accounts for 64.8%
Intergovernmental fees account for 11.5%
Sales tax accounts for 10.9%
Properties in Buncombe County were scheduled for a reappraisal in 2025, but that has been postponed until 2026. Regarding sales tax, the state levies a 4.75% tax that all goes back to the state while Buncombe County levies a local sales tax of 2.25% that is shared with the County’s fire districts, Asheville City Schools, school capital projects for Asheville City Schools and Buncombe County Schools, A-B Tech and municipalities.
Even in normal times, it can be hard to project sales tax revenues for budgeting, and it becomes significantly more difficult to predict in the wake of Hurricane Helene. Based on research, it could take years to return to pre-disaster levels of sales tax revenues.
Intergovernmental fees are received from federal or state governments and help cover costs for public health programs, foster care, public safety, and other important community programs.
The County uses the following revenue streams to round out its budget:
Sales and Service
Permits and Fees – largely restricted
Other Taxes and Licenses
Bond Proceeds
Investment Earnings
Sales and Service
Permits and Fees – largely restricted
Other Taxes and Licenses
Bond Proceeds
Investment Earnings
Expenditure drivers
The three largest areas the County spends money on are:
Salaries and benefits - 44.5%
Education - 28.3%
Operating expenditures - 13.6%
The County will also continue its capital improvement projects and paying debt on those initiatives. That will add some $5 million in annual debt over the next few years. Projects such as courthouse and detention center repairs are examples of work that needs to be financed. Due to post-Helene economic conditions, Commissioners will be faced with difficult choices on what will be funded for FY26 as they continue to work on the budget.
Refocusing the Budget for Recovery
With those difficult decisions in mind, the Board heard an update on 2025 strategic priorities and the work that had been done to update the 2025 Strategic Plan for 2030. Originally slated to be approved in November 2024, that work was interrupted by Helene.
As staff transitions emergency response to recovery, the County’s recovery support functions include Debris Management, Economic Revitalization, Health & Social Services (includes Education), Housing, Infrastructure & Access, and Natural & Cultural Resources. Staff will work to align recovery support functions with strategic priorities, recognizing that additional changes may be necessary moving forward.
Staff recently received the Interagency Recovery Assessment from FEMA and other interagency partners to help guide recovery strategies. (See attached.)
“Recovery is not a straight line,” says District 1 Commissioner Jennifer Horton. “I definitely think it’s important that we keep a realistic view of what’s happening in our communities.”
As staff transitions emergency response to recovery, the County’s recovery support functions include Debris Management, Economic Revitalization, Health & Social Services (includes Education), Housing, Infrastructure & Access, and Natural & Cultural Resources. Staff will work to align recovery support functions with strategic priorities, recognizing that additional changes may be necessary moving forward.
Staff recently received the Interagency Recovery Assessment from FEMA and other interagency partners to help guide recovery strategies. (See attached.)
“Recovery is not a straight line,” says District 1 Commissioner Jennifer Horton. “I definitely think it’s important that we keep a realistic view of what’s happening in our communities.”
Setting an honest timeline, incremental goals, and benchmarks that can be shared with the community are a priority for commissioners and staff. “Looking through that human lens, where are people hurting, where are they struggling the most, and what can we do as a county government to help expedite the recovery of people,” said Chairwoman Amanda Edwards. “…being a service-driven organization who takes care of people across the County, where in this foundational recovery piece do we have the opportunity in FY26 to make the most impact and moving forward?”
Next up, a work session for the FY26 budget is scheduled for March 20, and staff will have a more current revenue projection for both this fiscal year and next.
For more information and up-to-date news on the budget process, click here T
