Town Manager David Andrews recently kicked off the annual budget planning process, telling aldermen rising health-care costs, planning for stormwater infrastructure improvements and increased contributions to Chapel Hill Transit would be some of the major hurdles as the board allocates funding for the next fiscal year.
Andrews said spending on employee health care has increased approximately 7.8 percent each year over the past seven years, something he called a “red flag” for town budgeting.
He also told the board Chapel Hill Transit, which receives funding from Chapel Hill, Carrboro and UNC, projects Carrboro’s share will increase by $100,000 per year over the next eight years to help cover the cost of replacing older buses.
That would ultimately increase the town’s contribution from $1.5 million to $2.5 million per year by 2025.
Town officials are looking for money to improve stormwater infrastructure to minimize flooding in low-lying areas across town. Next year’s budget will likely add a dedicated fee that property owners will pay to support a stormwater enterprise utility fund.
While the town’s property tax revenues have increased incrementally in recent years, Andrews said the marginal growth has not kept pace with inflation.
Instead, sales taxes have surged by 5.1 percent, or roughly $1.1 million.
“The good side of that is that we’re diversifying the revenue base,” Andrews said. “The downside is that we’re becoming more reliant on consumption, and in the event that we were to have a recession or the like, we don’t have the stability of the property tax base. We’re relying on sales.”
Three approved development projects could add roughly $169,700 in property tax dollars and $60,800 in sales taxes to town coffers each year, according to a report from Carrboro’s Department of Economic and Community Development.
Director Annette Lafferty briefed the board on the town’s economic development activity. She said the Shelton Station and South Green developments are underway, and a new hotel is slated to begin construction this fall. The hotel would generate a estimated $170,000 annually in occupancy taxes that could be used to support tourism initiatives.
Two additional projects are working their way through the town review process, Lafferty said. If approved, a new CVS pharmacy could spring up at the corner of North Greensboro and Weaver Streets, and a mix of housing and retail could fill the vacant lot on Main Street behind the Spotted Dog restaurant.
Town Manager Andrews will present his recommended budget to the board May 2, with a public hearing scheduled for May 23.
Did you know?
Your Orange County tax bill amount varies depending on where you live within the county.
Carrboro’s tax rate is 0.58.94 cents per $100 of assessed property, meaning the owner of a house valued at $300,000 pays $1,768 in town property taxes, in addition to county and school district taxes.
Of the town’s total general fund revenues, property and sales tax revenues make up 74 percent of total revenues. In fiscal year 2016-17 each penny on the tax rate is projected to generate roughly $213,483.