Durham tax rate going up 2 cents

The City Council also gives the nod to a 5-percent increase in water and sewer fees

Staff WriterJune 20, 2006 

— Already bearing one of the state's heaviest loads in municipal taxes and fees, Durham residents will pay even more next year.

The Durham City Council voted 6-1 Monday night to approve a 2-cent increase, raising Durham's tax rate to 60.3 cents for each $100 of assessed property value.

On a $200,000 home, the increase will mean an extra $40 -- boosting the annual tax bill to $1,260.

The council also signed off on a 5-percent increase in water and sewer fees, an amount that will cost the average household about $24 more next year.

"I don't want to increase taxes, but we've got issues in this community that funds need to made available for if we are going to address [them]," Mayor Bill Bell said.

The tax increase, officials said, is largely because of increased spending to maintain the current level of service at the Durham Area Transit Authority, pay on the new debt that will be incurred from a $110 million in bond improvements approved by voters in November and replace worn out vehicles and infrastructure. The municipal work force also is set to grow, while city employees will receive pay raises averaging about 3.7 percent.

Durham currently has the highest taxes and fees of any North Carolina city with a population of more than 100,000, an analysis by The News & Observer showed last month. Whether Durham retains that title for the next fiscal year depends on the levies yet to be approved in the state's other large cities, but the high-tax tag is one that has rankled members of Durham's council.

Thomas Stith, the only board member to vote "no" on the budget, seized on the issue. Lobbing what might be an opening salvo in the 2007 race for mayor, where he is widely rumored as a likely challenger to Bell, Stith said the failure to pass a no-tax-increase budget started at the top.

"We're the highest taxed city of our size in North Carolina," said Stith, who is employed by a conservative think-tank in Raleigh. "We need to make sound fiscal decisions not based on politics."

Stith said the city budget, now topping more than $340 million, increased 27 percent over the past five years. By comparison, the city's population grew by 9 percent during the same period, Stith said. He urged residents to stop voting to elect council members who he said were not standing up for taxpayers.

"I'm probably the only one that will vote no tonight, but it's the right thing to do," Stith said.

Bell countered that no member of the council, including Stith, had proposed specific and likely painful cuts to city programs to avoid the 2-cent tax hike.

Staff writer Michael Biesecker can be reached at 956-242 or mbieseck@newsobserver.com.

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