Durham passes city budget after corporate revenue drain. What’s out, and back in.

The Durham City Council unanimously adopted a $767 million budget Monday night, but not before council members expressed the difficulty of their decision.

The final spending plan avoided a property tax rate increase but required compromises, including capping city employee pay raises at 2%.

Council members pointed to the strain of corporate property tax appeals that left the city with about a $9 million budget hole, alongside a nearly $10 million loss for Durham County. Commercial property owners, driven by corporate apartment developers, were responsible for 93% of a $4.4 billion loss in the tax base after the recent property revaluation process, INDY Week reported last week.

The multi-million dollar revenue loss caused the city to cut its standard pay-for-performance merit program for city workers.

“What I can say out of this very tough and difficult budget, I think that we’ve put the best version of it forth,” Mayor Leo Williams said. “We’ve made some really tough decisions, we’ve made some serious cuts, we have somehow found miracle money or miracle allocations to still make things whole ... there are still some tough conversations that we still have to have.”

A flat property tax rate, city wage cap

The City Council held the property tax rate steady at 43.71 cents per $100 of assessed value.

For a median home value of about $424,000 in Durham, the annual city tax bill will remain about $1,853.

However, homeowners in the city will also pay a countywide tax rate that is 2.5 cents higher than last year’s, bringing the new rate to 57.92 cents per $100 of assessed value. So, the owner of a home valued at $400,000 (about the median price in the county) will see a county property tax bill of $2,316.

The Durham County commissioners approved the county’s $1 billion budget on June 8.

Durham homeowners will also absorb secondary costs, including a $12 increase in water and sewer bills driven by rising utility infrastructure demands.

City workers will see a 2% pay increase, and the city’s minimum livable wage was increased to $25.09 an hour.

“We know that property taxes marginally affect lower-income residents more than higher income [residents],” Councilman Carl Rist said. “The budget is not perfect. My biggest regret is the fact that we can only give the 2% raise to our employees.”

Budget changes made before vote

During a June 4 work session, the council members directed city staff to restore funding to community agencies cut from the budget and to restore funding for a contract supporting staff in the District Attorney’s Office.

Satana Deberry, the county’s district attorney, wrote a letter to the council, saying the cut in funding would eliminate two assistant district attorneys. Residents and legal advocates also pushed the council consider continued funds to a partnership with Legal Aid of N.C.

City documents show the final budget restored, or partly restored, funding of $770,557, including:

• N.C. Administrative Office of the Courts (District Attorney): $156,747 (half the previous funding)
• Legal Aid of N.C.: $245,000
• West End Community Foundation/Lyon Park: $191, 400
• Durham Symphony: $100,000
• El Centro Hispano: $62,970

The budget also adds one-time additions of $172 million, which includes funding for a crossing guard pilot program, a one-hour free parking pilot program, Guaranteed Basic Income funding, and funds for a Justice Matters contract.

The budget also keeps city buses fare-free another year and earmarks $3.9 million for the city’s 5-year plan to reduce homelessness.

The ‘hardest budget’ in years

The budget played out against a backdrop of resident frustration over affordability, public safety and how the city should prioritize services as costs rise. Leslie St. Dre, an advocate with the environmental organization Community Land and Power, said the budget should “prioritize housing needs for our homeless people first, for people facing evictions.”

Resident Michael Harris said “we have to think about the mental stress that (is) happening to a lot of people here in Durham.”

At the same time, several speakers praised the council for adding money for other priorities, including immigrant legal defense services.

“[These services] will protect hundreds of Durham’s immigrant families as well as hundreds of mixed-status families in Durham,” said Adam Clark, the executive director for World Relief Durham.

After the vote, the council members described this budget season as unusually difficult. Councilwoman Shanetta Burris said of her first budget cycle that “I know we’re not going to always get it right.”

“If I ruled the world, I would ensure that everyone had all the fun they had, but unfortunately, those are not the circumstances,” she said. “Just thinking about how our food has risen and gas is going up ... it’s really important to think about our neighbors who don’t have the same financial situation that we do have.”

The city’s budget will go into effect on July 1. More information about the budget can be found online at durhamnc.gov.

This story was originally published June 16, 2026 at 8:03 AM.

Kristen Johnson

The News & Observer

919-829-4532

Kristen Johnson is a local government reporter covering Durham for The News & Observer. She previously covered Cary and western Wake County. Prior to coming home to the Triangle, she reported for The Fayetteville Observer and spent time covering politics and culture in Washington, D.C. She is an alumna of UNC at Charlotte and American University.