Johnston likely to end budget year in the black
Commissioners hear a budget update from Finance Director Chad McLamb.
To pay the County’s bills this fiscal year, Finance Director Chad McLamb thought Johnston would have to take $13.3 million from savings.
“We budgeted some fund balance to be able to do some things y’all had outside of the original budget,” he told Commissioners on Jan. 20.
He was referring, among other things, to land for a Johnston Community College campus in Clayton.
But instead of dipping into savings to make ends meet, the County is on track to end the fiscal year with a $10 million budget surplus.
McLamb attributed the surplus to several factors, including property owners paying their tax bills in full and on time. “We’ve had really good numbers in November, December, and then January is another big month,” he said of tax collections. “We’re seeing positive numbers.”
In 2025, Johnston underwent property revaluation, which raised property values across the County, often substantially. In response, commissioners lowered the tax rate from 67 cents to 52 cents per $100 valuation.
“I think you hit the sweet spot in terms of trying to provide relief to citizens and then be able to provide the county with the funds necessary to meet the needs of our citizens,” McLamb said.
But even with the 22.4% cut in the rate, “the numbers still look good in order to be able to do the things we need this year,” McLamb said.
“Revenue performance is trending very positively, and we have an optimistic look on the revenue going forward,” he said.
That includes sales-tax receipts, which have risen in tandem with growth in the County’s population and commercial base. “It’s continuing to trend upward,” he said. “We’re seeing an 8.3% growth over last year at this time.”
“We’re very fortunate where we’re situated — between I-40 and I-95,” McLamb continued. “We do get a lot of outside folks to spend money here. In economic downturns, we don’t see the effect as much as others because of where we’re situated.”
With sales-tax receipts, it’s more useful to compare one month to the same month a year before, McLamb said. “So all these months that we’ve seen, they’re growing between 4% and 10%,” he said.
Also, every year the state sends Johnston some sales-tax receipts based on a principle known as “hold harmless.” Some years ago, North Carolina changed how it distributes sales tax receipts to counties. A hold-harmless provision ensures that counties receive no less than they did before the state changed the distribution formula.
“We budget the low end of that,” McLamb said. “If it comes in at $9 or $10 million, that would be a boost.”
Turning from revenue to expenses, the finance director said Johnston was on track to spend less than he had budgeted for this fiscal year.
McLamb had put $412.5 million in spending in the 2025-26 budget. “Right now, we project to spend under $403 million, and that includes some projects that were not part of the original budget,” he said, pointing, for example, to that land in Clayton for JCC.
McLamb thanked County employees for bringing spending in under budget. “Every year, we consistently find that your employees are operating at an efficient and high level in how they serve the citizens,” he said.
Still, this year’s budget is bigger than last year’s and includes much new spending.
“One of the biggest increases is in the number of employees we’ve had to add,” McLamb said. “We’ve added fire, rescue, sheriff’s deputies to deal with the increase in demand. Education’s another.”
By the time the budget year closes on June 30, McLamb expects the County will have added $10 million to its cash reserves, known technically as fund balance. “That’s important,” he said. “As we spend more money, you do have to add a little bit to fund balance every year to maintain that fund balance percentage.”
McLamb put the year-end fund balance, or savings, at just under 56% of spending. Commissioners want to keep at least 40% in reserves.
As the County takes on some building projects, including a new Clayton High School, McLamb and Commissioners expect savings to creep closer to that 40% figure.
But the cash reserves will still be healthy enough to maintain the County’s AAA bond rating, which allows Johnston to borrow money at the lowest possible rates.
“That fund balance is going to look good to the people that are buying our paper, and we’re going to get good rates on that paper,” McLamb said. “It’s going to save us millions of dollars going forward.”
Page last updated on: February 13, 2026