The Isle of Wight Board of Supervisors and staff are in the midst of determining the budget for fiscal year 2012-2013, which starts this July 1.

First, a little explanation.

The budget is basically composed of two areas — the operating budget and the capital budget.

The operating budget funds all the normal day-to-day functions it takes to keep county services performing at a quality level. This includes the county’s share of the nine schools, including teachers, staff, supplies, utilities and the like.

In addition, the operations budget funds our sheriff’s office with 43 deputies, our five fire units, our four rescue units, our county staff, our judicial system, refuse collection, our seven parks, economic development, which seeks to attract new business to the county, and many other areas of service.

The capital budget mainly includes large one-time expenditures such as school buildings, fire trucks, ambulances, patrol vehicles, park amenities, water systems, trash compactors, roof replacements and other similar expenditures.

These are the two areas we as supervisors look at every year and determine what level of service should be provided to the citizens.

Here are some challenges, at least for the foreseeable future:

n The closing of International Paper. Isle of Wight took a $5.1 million annual reduction as a result. The mill not only provided good jobs for a large number of people, it helped to keep Isle of Wight tax rates at a low level compared to surrounding areas.

* Rising expenses to stay at the same level of service. These include health insurance rates, basic utilities and fuel. For instance, when gas prices rise dramatically, it affects all areas in our county including school buses, patrol cars, and fire and rescue units.

* Mandates by the state. Our county will be required to send an additional $1 million to Richmond to shore up the state retirement fund. We have no choice in the matter. I would love to elaborate on these unfunded mandates in a future column.

* Anticipated Chesapeake Bay cleanup expenses. This is regulated by the Environmental Protection Agency and has the potential to cost the county millions in the future.

* A rising debt payment on past investments. Whether you personally agreed with these investments is irrelevant. The county must honor its obligations. This payment comes directly out of our operating budget and reduces funds available for operations.

* A general consensus by the board to not raise taxes. I believe “fiscally conservative” could describe each of us.

* There you have it. Increased expenses with a limited income, which probably describes many of your households.

I’m really no different than you. I am a farmer in southern Isle of Wight who comes in from the fields, puts on a coat and tie, and drives to Isle of Wight.

I look at these same figures I just presented to you. There is no magic bullet, no fund that will rescue us. Only hard choices as we go forward in deciding what services are essential for the good of our citizens while making responsible financial choices in the process. Your comments are certainly welcome.

After all, it is your money.

REX ALPHIN  is an Isle of Wight County supervisor for the Carrsville District and can be reached at Rexalphin@aol.com.