Rising sales tax and development fee revenues will help cover a slightly higher town budget next year without increasing property taxes, Town Manager Roger Stancil said Monday.
The draft $100.7 million budget is about 3.5 percent higher than last year’s budget. It adds $100,000 for affordable housing projects, $800,000 for new Chapel Hill Transit buses and 16 new full-time jobs, including five general and fire inspectors, a plans reviewer and an affordable housing officer.
Town employees would receive a 4 percent raise – 2 percent in July and 2 percent in January – setting the stage for the town’s move to twice yearly market- and performance-based salary increases, Stancil said. Health insurance for town employees could cost 8.5 percent less, he said.
Mayor Mark Kleinschmidt called the budget news “amazing.”
“There are some things that have really been challenging for the council – not just here in Chapel Hill but in communities around the state – for many, many years,” he said. “There’s some good news on some of those perennially difficult issues that I think are worth noting.”
Sales tax revenues are projected to grow 11 percent, or roughly $1.2 million, following years of falling revenues and below average growth after the 2008 recession, said Ken Pennoyer, the town’s business management director.
While sales tax money could cover about 19 percent of the town’s expenses, that number could change in response to what state lawmakers do this year, Stancil said.
“It’s kind of like a bob and weave with the state right now,” he said. “We’ll try to keep everybody up to date with what’s going on.”
The town’s current property tax rate is 52.4 cents for every $100 in assessed property value and will cover about 49 percent of 2015-16 expenses. The owner of a house valued at $300,000 would continue to pay $1,542 in town taxes.
Chapel Hill residents also pay a county tax rate of 87.8 cents and and a special city schools district tax rate of 20.84 cents per $100 in assessed property tax value. The county manager is expected to present a budget plan May 19.
The town’s licensing and permitting fee revenues also could climb 55.8 percent, or by roughly $1.1 million. Stancil said that is largely from state-mandated changes in fire inspection requirements and increasing development. The money will help pay for more inspections and planning staff to handle the additional workload, he said.
The town’s annual stormwater fee could go up by $1.40 to help pay for planning and projects across town, he said. The fee is now $24.75 a year for every 1,000 square feet of impervious surface, such as driveways and roofs.
The Town Council will hold a budget public hearing May 18 and could vote June 8. The 2015-16 budget would go into effect July 1 and could be balanced with roughly $2.6 million in town savings.