The Orange County Board of Commissioners could approve a $200.4 million budget Tuesday that adds two cents to next year’s property tax rate, in part to address schools needs.
The board voted 5-2 Thursday night to signal its intent to adopt the amended draft budget – roughly $13 million more than last year’s $187.7 million budget. The board could continue to make changes until the budget’s final adoption Tuesday.
The proposed budget relies on $10 million from the county’s savings, or fund balance, to fund millions in additional school needs, to provide more money to local nonprofit programs and to hire a full-time county business retention specialist.
Nearly 49 percent, or roughly $97 million, would fund the Chapel Hill-Carrboro City and Orange County school systems. That includes roughly $24.3 million for capital improvements and debt payments.
The proposed budget fulfills nearly all of this year’s local schools’ requests. The districts together had requested a total of $6.8 to $7.8 million in additional funding for next year.
Todd LoFrese, assistant superintendent for support services, has said the state budget could leave the city schools another $3.6 million short of identified needs. The Orange County Schools have not identified their potential shortfall under the state budget.
Two cents – a 2.3 percent increase – seems reasonable when schools need the money, Commissioner Alice Gordon said. The schools may end up having to cut jobs no matter the decision, she said. Commissioner Mark Dorosin agreed, adding the board hasn’t raised the property tax rate in years.
“I also do think that it is important, though, to note some of the extraordinary moments we’re in. I’m not as concerned that we’re setting precedent (or) that we’re going to let the school budget overwhelm the county budget,” Dorosin said.
Commissioners Vice Chairman Earl McKee and Commissioner Renee Price voted against the proposed tax increase. Both said they favored Price’s alternate suggestion of a 1.75-cent tax increase.
“I would rather raise (taxes) in increments, even if we have to come back next year and raise it a little bit more … so somebody isn’t hit all of sudden with a larger tax bill,” Price said. “We’re experiencing and will continue to experience, if we do it this way, people just leaving the county.”
The proposed tax rate – 87.8 cents per $100 in assessed property value – would add $60 to the county’s tax bill for the owner of a $300,000 home. The increase would be in addition to Chapel Hill’s recently approved one-cent property tax increase to 52.4 cents per $100 in assessed value. The town’s tax rate increase will help pay for future building projects.
The Chapel Hill-Carrboro City Schools district tax would remain 20.84 cents per $100 in assessed property value. The city schools tax is expected to provide the district with roughly $21.8 million next year.
Residents who live in the Orange County Schools district do not pay a schools tax.
Under the current scenario, the owner of a home valued at $300,000 in Chapel Hill would pay a combined town, county and schools tax bill of $4,831.20 next year. A property owner in the Carrboro town limits could pay $5,027.40, and a rural taxpayer could pay $2,634.
Property owners who live in the Chapel Hill town limits but in Durham County would pay taxes to both of those governments but not Orange County taxes.
The commissioners also are set to approve requested tax increases in two rural fire districts: New Hope and White Cross. Residents in the New Hope fire service tax district could see their fire tax rate grow a half-cent to 9.95 cents per $100 in assessed property value. White Cross residents could pay 2.20 cents more, or 11 cents per $100 in property value.
The discussion about raising fire service district taxes prompted Chairman Barry Jacobs to say the board needs to sit down and talk about a tax policy. Property owners are paying multiple taxes and fees, he said.
“You start getting to a place where it’s an uncomfortably heavy burden for the individual property owner to pay,” he said.
Other budget highlights include a 1.5 percent cost-of-living pay raise for county employees and the opportunity for them to earn $500 or $1,000 performance bonuses.
The budget also includes an increase in the county’s living wage from $10.97 to $12.76 per hour and plans to pay retiree health benefits and a 14.35 percent increase in employee health insurance costs.
The living wage increase also would apply to the county’s temporary employees.