Cary News

With slower growth, Cary will likely cut back on spending

Cary’s revenue growth is slowing, and Town Manager Sean Stegall says it’s time to rethink the approach to spending.
Cary’s revenue growth is slowing, and Town Manager Sean Stegall says it’s time to rethink the approach to spending. File photo

The property tax rate would remain the lowest in Wake County under Cary’s proposed budget plan.

But revenue is growing at a slower rate than in the past few years, and Cary’s town manager says now is not the time to take on new costs.

“The ability of the town to rely on growth revenue has come to a close,” Sean Stegall told the Town Council last week. “(The draft budget) is not filled with new initiatives. We must learn how to evolve as we go from being a growing community to a mature one.”

Staff’s proposed budget for the fiscal year that starts July 1 is $311 million – less than the current year’s total of $319 million. The decrease includes a $23 million drop in major project spending after a heavy year of capital improvements.

Cary’s property tax rate is 35 cents per $100 valuation.

Operational spending, including employee salaries, public safety and parks, would increase from $227 million to $242 million under the plan, which the Town Council is expected to approve June 22.

In his budget document, Stegall said the combination of slowing growth, the state’s changing revenue regulations and aging infrastructure will “strain” the town’s finances in the near future. He warned that the town could not afford to continue adding to its staff in the same way it had in the past.

“To keep Cary great, we must recognize that although adding employees sometimes may be necessary to address operational issues, doing so always should be the solution of last resort,” Stegall wrote, “because new employees come with a cost that cannot be funded in a low growth environment without significant tax increases.”

Stegall said the town should adopt a new approach to staffing that emphasizes employee versatility rather than specialization.

Despite his warnings, Stegall highlighted a few new discretionary proposals. They include $250,000 for work on the town’s branding efforts, $1 million toward historic preservation and a new detective position in the police department to address Cary’s growing opioid problem, which has recently become a major focus for the town.

In a sign of Cary’s growing emphasis on maintenance and renewal, the draft budget also proposes doubling the town’s housing rehabilitation fund to $300,000 – money that helps lower-income homeowners maintain and stay in aging homes.

“This recommended budget represents a departure in approach for Cary,” Stegall’s statement concludes. “The new approach to the use of resources reflected in this budget is a recognition that we are in a rapidly changing environment in which our resources will grow more slowly than in the past. As a result, we must make data-driven decisions about our operations and how to fund them, and we must be accountable for performance.”

No tax change in Morrisville

In Morrisville, a draft budget calls for leaving the property tax rate unchanged at 39 cents per $100 of assessed value.

The plan proposes $34.9 million in total spending next fiscal year, up from the current $32 million. Higher-than-expected sales-tax revenue accounted for the growth.

Morrisville’s proposal includes a few new initiatives but mostly highlights contributions toward ongoing infrastructure projects, including the design and widening of Morrisville Carpenter Road and the McCrimmon Parkway Extension, and also the Morrisville Aquatics and Fitness Center.

“We are starting to set aside money for transportation and rehabilitation of our roads,” Mayor Mark Stohlman said. “And we’re doing this at a time when we have to pull a lot of money out of the fund balance for all these projects we’re in the middle of.”

In an effort to reduce staffing costs in the long term, town staff have recommended redrawing the town’s health insurance offerings to include an option that requires an employee contribution toward premiums. A standard, no-contribution plan will still be available for individuals, but with slightly higher deductibles and co-pay costs.

“We have to pay these higher premiums this year, and if we don’t have that employee contribution, we can’t balance out the premiums,” Town Manager Martha Paige said.

Paige added that the change would bring Morrisville’s policy in line with other municipalities of its size.

“We might ask whether this is a competitive advantage we do have compared to other municipalities,” Councilman TJ Cawley said. “We should ask whether we want to give that up.”

A public hearing on the budget is scheduled for the Town Council’s May 23 meeting. The council will adopt a budget in June.

Gargan: 919-829-4807; @hgargan