A one-cent rise in the property-tax rate could be part of the city’s 2015-16 budget, if the fire and police departments show “data and strategy” to support adding firefighters and officers.
A possible tax increase to pay for the new personnel is among the City Council’s guidelines for staff to follow in drafting a budget for the fiscal year that begins July 1. Otherwise the guidelines hold the line on the current property-tax rate of 59.12 cents per $100 valuation.
Adding a penny would raise the tax on a $250,000 house and lot by $35. Formal adoption of the guidelines (nando.com/guide) is scheduled for the April 6 council meeting.
Fire Chief Dan Curia and Police Chief Jose L. Lopez made cases for adding personnel at a February budget retreat with council members and other city department heads.
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Council members pressed Lopez, in particular, for more data to show that Durham’s force is understaffed compared with similar U.S. cities. They also wanted a clear plan for how more officers would be used.
City Manager Tom Bonfield is due to proposed his budget May 18. State law requires cities to adopt balanced budgets before the new fiscal year begins, but uncertainty over decisions by the state legislature leaves municipal budget-makers with clouded prospects for next year’s revenue.
Last year’s elimination of the “privilege license,” or business tax, left Durham with a $2.9 million gap in its 2015-16 projections. The council’s guidelines allow for transferring $2.9 million out of a debt-service fund to cover the gap if the legislature fails to make up the cities’ lost revenue.
Such a shift would reduce the city’s ability to borrow money for new capital projects, such as the sidewalks to which council members have given a high priority.
The General Assembly is also considering changing the formula for sales-tax distribution, sending more to rural areas and less to urbanized areas such as Durham. Bonfield told the council that Durham County, which shares sales-tax income with the city, could lose as much as $7 million.
“That’s a hit, folks,” said Councilman Eugene Brown. “A big hit.”
Bonfield said he did not know where money might be available to transfer if the city has to make up for loss of both the privilege license and sales-tax income.
Despite the uncertainties, the guidelines retain the current allocations for garbage pickup (5.89 cents of the 59.12 tax rate), low-income housing (one cent), parks maintenance (one-half cent) and transit operations (3.87 cents).
Water and sewer fees, which are programmed to gradually rise each year through fiscal 2018-19, are capped at an average 3 percent increase. Annual increases are intended to pay for catching up neglected maintenance and meeting enhanced standards for treated wastewater flowing into Falls and Jordan lakes.
Stormwater fees are not scheduled to change.