Mayor Nancy McFarlane on Monday said officials may need to raise property taxes or stretch resources thin in the coming budget year to keep up with the needs of a growing city.
Raleigh is grappling with the loss of about $7 million in income from privilege taxes, special operating fees on certain types of businesses. The state legislature last year banned cities from collecting them.
“We’re still hoping that the General Assembly will make good on their promise to find a way to fill the void left in our and other cities’ budgets, but time is running out. We don’t really see a solution coming,” McFarlane said during her annual State of the City address.
City leaders already have considered the possibility of lower service levels or higher property taxes in council discussions. The mayor’s comment is the highest-profile acknowledgment of a budget gap estimated in early February to be between $4 million and $6 million.
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Councilman John Odom said he’s opposed to a property tax hike. Increased revenue from growth and slowing down some planned projects should help bridge the budget gap, he said.
“You just have to make a decision about what you want,” he said.
Councilman Eugene Weeks said he’s open to discussing a tax increase, as long as it’s not an undue burden on already-struggling families.
‘Potential is unlimited’
McFarlane focused on the city’s growth in her speech to the Rotary Club of Raleigh, touting successes such as new businesses as well as the problems growth can bring, including problems for residents with lower incomes.
“We as a city must make sure we do all that we can to ensure every citizen has every opportunity available to them no matter who they are or where they live,” she said.
She stressed the need for affordable housing, saying the issue is not just one of shelter but also of access to jobs, health care and quality food.
The mayor highlighted a deal between the city and the state for the 308-acre Dorothea Dix property, where Raleigh plans to build a park. McFarlane said she hopes the last of the deal’s details will be hammered out by the summer.
The mayor said the key to Raleigh’s continued success will be careful planning, from managing traffic to ensuring a thriving arts scene.
“Raleigh’s at a moment in time when the potential is unlimited,” she said. “As great as Raleigh is, I believe in better.”