Revenue projections plunge from COVID-19 as Durham County considers new budget
Taxes would not go up for most Durham County property owners.
County employees would not get raises.
And the Durham Public Schools would get just over a quarter of the nearly $19 million increase in local money the school board requested.
Those are a few components of the nearly $675.9 million budget Durham County Manager Wendell Davis presented Monday night.
Local governments must pass budgets by June 30 for the fiscal year that begins July 1. The COVID-19 pandemic has forced many cities and counties to rewrite their spending plans to minimize tax increases and fees that might strain households facing unemployment and mounting bills.
The proposed budget calls for eliminating overdue library fines, but residents would still be charged for lost or damaged items. The change would cut library revenue by $85,000 annually, according to county officials.
The county managers in Orange and Chatham counties have also proposed budgets without property tax increases. The Wake County manager will present his budget next week.
Expected revenues plunge
Typically, budgets build on previous years’ momentum and predicted growth, Davis told the county commissioners.
“But the profound effect of the current public health climate, its related economic ramifications and the unknown length of both issues into next fiscal year makes this year’s budget assumptions, and therefore development, highly variable and highly uncertain,” Davis said.
In February, the county was projecting revenue to grow by up to $15 million. By March 27, that had fallen to $1.67 million.
By May 4, it was down to $216,000, according to Davis’ presentation.
Davis’ plan calls for a total budget increase of 2.68%, or $17.6 million.
The general fund, the county’s largest fund that covers basic services and discretionary spending, would increase by 2.61% to $468.7 million, under the proposal.
While property taxes — the county’s largest revenue source — are expected to increase by $4.2 million, the county expects to lose about $3.9 million in sales tax.
Shifting money to meet needs
Some spending increases were still needed.
The proposed budget transfers $4.3 million from the capital financing fund and $5.9 from capital projects, according to information provided by the county.
Davis found other savings through $3.1 million in departmental budget cuts, not giving raises to the county’s more than 2,000 employees, freezing vacancies, and limiting the creation of new positions.
The $100,000 and $50,000 typically set aside for the commissioners’ and manager’s discretionary spending on unplanned needs was cut entirely.
The changes will help cover about $9.1 million set aside for COVID-19 expenses, $1 million in information technology upgrades, $2.7 million in increased employee health insurance costs and new positions required by the state, according to the proposal.
A public hearing on the budget will be held May 26. The county will hold up to five budget work sessions between May 19 and June 8, when the budget is set to be approved.
Property tax rate
The proposal would mark the first time in three years that county property taxes wouldn’t increase.
The tax rate would remain at 71.22 cents per $100 of assessed property value, meaning the owner of a $300,000 home would pay $2,136.60 in county taxes.
Property owners in the city also pay a separate city property tax. City budget officials said they aren’t planning to raise taxes, so the combined rate would remain at $1.2439 per $100 of assessed property value.
The budget also calls for a 1.51 cent increase to the existing 7.8 cent per $100 tax rate in the Research Triangle Park special district. RTP wants to make up for reduced property valuation and long-term trail improvements, Davis said. The change would affect about 297 taxpayers, according to information provided by Durham County.
The proposal also calls for a 1 cent tax-rate increase for the Durham County Fire and Rescue Service District to support consolidation with the city, debt payments and service for three trucks. About 4,401 taxpayers own property in the district.
Durham Public Schools
The Board of Education requested a nearly 13%, or $18.8 million, increase in local funding, which would include $14.2 million for operating expenses and $4.6 million for capital projects.
The request included money for salary increases, increasing teacher salary supplements, adding school counselors, and more positions to support English language learners.
Davis’ proposal gives the district $3.23 million to support student growth and $2 million for capital needs. The total budget allocates $177.2 million for schools.
Under the changes, per pupil funding would increase by $12 to $3,659.
Gang consultant sought
The budget includes splitting a $100,000 expense with the city for consultant services to update the county’s assessment of area gangs, which helps guide gang-reduction efforts.
New social services hires
In general, the proposed budget calls for not filling vacancies, but it still creates about 63 positions.
The new positions include 57 new Department of Social Services positions as part of state-directed improvements in Medicaid enrollment. The new positions, supported with grant money, are expected to cost about $1.23 million.
The state expects all county Medicaid enrollment programs to meet new guidelines, and the new positions are needed to meet them, county officials said.
This story was originally published May 12, 2020 at 7:00 AM.
