DURHAM - County officials are considering raising the property tax rate by about 2.7 cents next year to keep the county running at about its current levels and meet debt, cost-of-living and energy increases, according to a proposal Tuesday night by County Manager Mike Ruffin.

If county commissioners accept Ruffin's proposed property tax rate of 71.6 cents per $100 of property value, the owner of a $186,000 home -- the median home value in Durham County -- would pay $1,331 in property taxes to the county. That is about $51 more than if the county doesn't raise the tax rate.

In a presentation to commissioners, Ruffin outlined a few changes in the $683.6 million general fund, the pot of money that pays for most county services, including schools and social services. The proposed total is about 3.5 percent larger than last year's general fund budget.

Ruffin identified two major factors in the fund increase.

One is a $7.5 million proposed budget increase from the Durham Public Schools. Ruffin recommends funding about $7.2 million of that request to pay for growth, rising energy costs and teacher raises.

The other major driver is a $3.5 million surge in the county's debt payments -- voters have approved three multimillion-dollar bond issues in the past five years for schools and other capital improvements.

Although new legislation is giving the county an estimated $5.4 million break from paying Medicaid claims for Durham residents, the county also expects to see a decrease in sales-tax income, to the tune of $3 million.

The revenue drop is a sign of the softening national economy, one that all local governments are struggling to compensate for, Ruffin said.

"Shrinking revenues are always going to put stress on your property tax rate," he said. "That's the only source of revenue our board controls."

Ruffin proposed increases to some county expenditures, including a 1 percent cost-of-living adjustment for all county employees.

Also under Ruffin's plan, the county would contribute about $400,000 in startup costs for Project Access, a new initiative to help uninsured residents obtain specialty medical care free from physicians who donate their services.

Ruffin also is recommending a $100,000 contribution, matched by the city, toward a study of the fire department services in both the city and county. The seven volunteer fire districts, which serve an estimated 40,000 residents in unincorporated areas of the county, all require different tax rates for residents to receive their services.

"I think fire service is inefficiently provided in Durham County," Ruffin said. "People receive the same fire services but pay different amounts. That's not fair."

An analysis of the city's and county's fire departments might explore unifying all of the county's volunteer fire departments into one countywide fire department, or might even suggest merging the city and county services, Ruffin said.

The Board of Commissioners is scheduled to review the budget over the next three weeks. A public hearing is set for 7 p.m. June 9 in the commissioners' chambers at the Old Courthouse, 200 E. Main St.

The proposed rate increase could change in the coming weeks. Commissioners are scheduled to approve the budget and final rate June 23.

"I think as we review, we'll obviously be looking at balancing the needs of our county and the impact on our property taxpayers," said Ellen Reckhow, chairwoman of the Durham County Board of Commissioners.

Meanwhile, city officials are considering a proposed tax rate of 56 cents per $100 of property value, which would add another $1,042 to that median homeowner's tax bill.

If both city and county officials adopt their managers' proposed tax increases next month, a city resident with a home value of $186,000 would pay about $2,373 in property taxes to the city and county. That would be a combined 7 percent increase over last year's tax bill.

The city will hold its public hearing on the budget at 7 p.m. June 2 at 101 City Hall Plaza, and the council is scheduled to approve the final budget June 16.

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