Proposed Chapel Hill budget raises property tax rate 2 cents

tgrubb@newsobserver.comMay 13, 2013 

— Town Manager Roger Stancil has recommended the Town Council approve a 2-cent increase in next year’s property tax rate.

The increase, a penny each for the general fund and Chapel Hill Transit’s growing costs, would raise the town tax rate to 51.4 cents per $100 in assessed property value.

It would add $60 to the property tax bill for a home with a $300,000 tax value, making the total Chapel Hill tax bill $1,542. The town’s property owners also pay county and school district taxes set by the Orange County Board of Commissioners.

This would be the first time in four years that the town has raised property taxes, Stancil said Monday. Next year’s budget also includes a $9 increase in the town’s stormwater fee, the first increase since 2004.

“I don’t think people like tax increases, so I think that will be reflected in the reaction to it. But we’ve been throughout the whole recession without a tax increase, and we just can’t keep doing that,” Stancil said. “We’ve got to say no to some more things if we don’t want a tax increase.”

The $53.8 million budget for 2013-14 would be balanced using roughly $2 million from the town’s fund balance, a reserve account used to manage cash flow.

The proposed budget includes a 2 percent salary increase for all town employees to keep salaries competitive and consistent with surrounding communities, he said. Town employees received a 3 percent raise last year, the first in three years.

The spending plan also includes enough money to add four hours to the Chapel Hill Public Library’s operating schedule. New library Director Susan Brown will evaluate this summer when to use those available hours and what staff she would need, Stancil said.

Council member Jim Ward suggested the town manager and library director collaborate as soon as possible to use that money, rather than waiting until it’s in hand in July.

“We’ve heard an awful lot already about the travesty, in some people’s minds, and I would share that position, about having this great library and it not being open at critical times during the week. To let this play out another half a year seems unnecessary,” Ward said.

Town Council members will discuss the proposed budget in more detail at Monday’s public hearing and at budget sessions planned for May 22, June 3 and June 5. The council could adopt the budget June 10.

Stancil said the recommended budget shouldn’t be a surprise. Town staff has been talking about a number of challenges facing the town for at least a year, including the library expansion, the transition from the Orange County Landfill to a Waste Industries transfer station in Durham, and the sustainability of the Chapel Hill Transit partnership and its fare-free system.

The town will lose $872,000 in state transit funding next year – more than 1 cent on the property tax rate – and federal transit funding also could be cut, he said.

Other expenses in the 2013-14 budget include an employee classification and compensation plan that could wrap up soon, additional information technology positions and programs, and additions to or modifications of existing youth programs. There’s also $828,500 in capital improvements projects. Roughly 20 percent of the money would pay engineering costs for the Ephesus-Fordham construction project, buy a mobile stage for Parks and Recreation, and install cameras in police vehicles.

While sales tax revenues are up 2 percent this year – almost to pre-recession levels – property tax values remain sluggish, Stancil said. The town also can’t issue any more debt or seek another bond referendum until 2017, when $20 million will be available, he said. The town could access up to $60 million in debt after 2023, he said.

Next year’s budget delays $88 million in major projects, including new police and fire departments, a waste transfer station and the Parks and Recreation master plan. Planning for a 2017 bond referendum could start as early as 2015, Stancil said. Because the county might want to hold a bond referendum, too, Stancil said the town could talk with county staff about joint planning opportunities.

Grubb: 919-932-8746

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service