Chapel Hill OKs biggest tax hike in years. Orange County funds mobile crisis unit.
Some Orange County governments are raising taxes because of Inflation, longstanding needs and the pressure to hire and keep quality employees.
The Chapel Hill Town Council approved its biggest tax hike in a long time in June, adding 5 cents for every $100 in assessed property value. The increase adds $200 to the annual tax bill for the owner of a $400,000 home.
The 2023-24 budget is also the first year of the town’s five-year plan to replace dozens of older police, fire and public works vehicles and catch up on deferred maintenance and facilities, including parks and affordable housing.
The Orange County commissioners, meanwhile, found a few more local dollars to support the Chapel Hill-Carrboro and Orange County school systems, which had requested a $21.2 million increase this year. The pending budget covers about half of that request.
It also recommended spending more on programs addressing social and behavioral health, public safety, and staff salaries and benefits.
Hillsborough and Carrboro homeowners won’t see a property tax rate increase, although they could pay higher water and sewer bills. Town of Hillsborough customers will pay 6% higher water and sewer rates, while Orange Water and Sewer Authority customers in Carrboro and Chapel Hill will pay 16% higher rates.
Local budgets run from July 1 to June 30. Here are more details:
Chapel Hill
▪ Total budget: $144.3 million, an 11% increase over last year
▪ General Fund (daily operations): $84.5 million
▪ Transit Fund: $32.1 million
▪ Debt Service Fund: $12.8 million
▪ Other funds: $14.9 million
▪ Property tax rate: Adds 5 cents, or a 10% increase. The new tax rate — 57.2 cents per $100 in assessed property value — adds $200 to the bill for a $400,000 home. Chapel Hill property owners also pay county taxes and a schools property tax if they live in the Chapel Hill-Carrboro City Schools district. The council approved spending $100,000 to help lower-income residents pay their tax bills.
▪ Town staff: All employees would get a 5% pay raise, based on the market rate for their job. Additional money for employees with dual language skills and 14 new positions, including three firefighters, a special projects planning technician, commercial plans reviewer, crisis counselor and municipal arborist.
▪ Big takeaways: This is the town’s first five-year budget plan for addressing a roughly $60 million backlog of maintenance, vehicle purchases and other needs, and planning for the future. The town has only raised taxes in five of the last 14 years, for a cumulative tax rate increase of 6.68 cents since 2009, or less than 1% each year. A penny of next year’s tax rate increase will raise $911,000 for parks.
▪ Budget link: townofchapelhill.org/budget
▪ The vote: 7-1. Mayor Pro Tem Karen Stegman was not present for the meeting.
Council member Adam Searing voted no, saying he still has concerns about the tax burden that residents already bear, especially those on fixed incomes, and unfulfilled promises, including an adaptive playground and a splash pad facility, while the town spends money on consultants and approves controversial developments.
Other council members wanted to increase the rate more slowly, but the town has critical needs, maintenance responsibilities and must plan for the future, Mayor Pam Hemminger said.
Property taxes provide 48% of the town’s revenue. Homeowners pay about 80% of those taxes, she said, but the town is seeking more commercial development and is already benefiting from businesses, such as Wegmans and Well Dot.
The town also has to invest in its employees, Council members Michael Parker and Camille Berry said. Parker noted staff received 4% and 5% pay raises last year but that inflation rose higher. In April, the U.S. inflation rate was 4.9%.
Orange County
The Orange County commissioners finalized their draft budget in about 90 minutes Thursday — the fastest county budget-drafting session in at least a decade. Normally, the process lasts well into the night, with a quick vote to approve a week or so later.
▪ General Fund (daily operations): $279.5 million
▪ Capital Improvements: $58.4 million for affordable housing ($5 million), schools, solid waste, SportsPlex and county projects.
▪ Property tax rate: 83.53 cents per $100 in assessed property value, an increase of 0.41 cents. The owner of a $400,000 house will pay $3,341 in county property tax, an additional $16.40.
▪ Schools tax rate: 19.8 cents per $100 in assessed property value. The owner of a $400,000 house in the Chapel Hill-Carrboro City Schools district will pay $792, an extra $60 in property taxes. Homeowners in the county schools district do not pay the special tax.
▪ Fire district tax rates: Fire district taxes help local fire departments buy equipment and hire personnel. Tax rates — levied on every $100 in property value — rose in Cedar Grove (9 cents), Damascus (12.8 cents), Efland (10.28 cents), Little River (7.39 cents), New Hope (12.57 cents), Orange Grove (8.27 cents), Orange Rural (10.49 cents), Southern Triangle (12.80 cents), and White Cross (13.84 cents).
▪ County staff: Employees will get a 6% pay increase and continue to earn merit bonuses. The living wage is now $16.60 an hour, and the budget funds new part- and full-time positions, including six human services specialists, three solid waste drivers, four detention officers, a community paramedic, and housing grants and capital projects field coordinators.
▪ New social service programs: Next year’s budget includes money to provide a center where children involved with Social Services can visit with their families, and money for a pilot behavioral health crisis mobile unit in partnership with Chapel Hill that would include a peer support specialist, crisis counselor and community paramedic.
▪ Chapel Hill-Carrboro City Schools: $60.2 million, plus $27.8 million in school district taxes
▪ Orange County Schools: $42.8 million
▪ Per pupil spending: $5,346 per student. The extra $538.46 per student is the highest increase in county history.
▪ Budget link: orangecountync.gov/714/County-Budgets
▪ The vote: 7-0, which approved a resolution of intent to adopt the budget on June 20. The final vote is typically a rubber stamp, but changes can be made until the last minute.
The commissioners approved several adjustments to the manager’s recommended budget, including:
▪ $150,000 for the Inter-Faith Council for Social Service to provide housing and support services to chronically homeless people
▪ $90,000 to create the OC Build pilot program, which would provide high-risk young people who are involved in the court system with counseling, mentoring and case management.
▪ A request that the Chapel Hill/Orange County Visitors Bureau and the SportsPlex repay 20% of the pandemic recovery funds they received from the county — $112,000 and $150,000, respectively. That reduced the proposed property tax rate by 0.12 cents.
▪ Commissioners Vice Chair Earl McKee cast the only vote opposing Chair Jamezetta Bedford’s suggestion that the county increase its contribution to the Chapel Hill Public Library by $85,000.
The commissioners have been talking for a while about whether the partnership should end once the Southern Branch Library opens in Carrboro, increasing the cost for the county’s own library system. The county started supporting the Chapel Hill library in 2012 because many county residents are patrons. A 2015 question about whether to end the funding arrangement failed in a 5-2 vote.
The commissioners this week voted 6-1 to give the library more money, for a total annual contribution of $621,323.
McKee also questioned the fairness of a policy change that transferred $75,543 in technology funding from the county schools to the Chapel Hill-Carrboro schools. The change excluded charter school students from district enrollment numbers that are used to allocate Article 46 sales tax funding. The quarter-cent sales tax raises money for school capital needs and economic development.
The state does not require counties to provide capital funding to charter schools. As of March, 999 county schools students and 210 city schools students were enrolled in charter schools, according to the budget.
The commissioners approved the funding transfer.
Carrboro
▪ Total budget: $81.1 million, a 10.7% decrease from last year
▪ General Fund (daily operations): $29.3 million
▪ Capital Projects budget: $41.5 million, including greenway construction, the 203 South Greensboro library project, Town Hall renovation planning and design, money for several police, public works, and parks and recreation vehicles.
▪ Special Revenue Fund: $9.1 million, including $6.4 million in one-time federal pandemic relief money
▪ Property tax rate: No tax rate increase. The tax rate will remain 58.94 cents per $100 in assessed property value, generating a $2,062.90 bill for a $350,000 home. Carrboro property owners also pay county taxes and a schools property tax if they live in the Chapel Hill-Carrboro City Schools district.
▪ Big takeaways: Town employees get a 5% raise in 2023-24. The town continues to dedicate 1.5 cents of every $100 in assessed property value to affordable housing. The budget also includes money for a comprehensive stormwater infrastructure study and to implement plans for a paid parking system, parking enforcement and public engagement around the possibility of a downtown municipal service district.
▪ Budget link: tinyurl.com/522j3ctf
▪ The vote: 7-0, unanimous
Hillsborough
▪ General Fund (operating) budget: $16.5 million, a 15% increase from last year
▪ Water and Sewer Fund: $14.4 million
▪ Water and sewer fees: 6% increase. The minimum monthly water charge is $22.80 for in-town customers and $44.41 for out-of-town customers. The minimum monthly sewer charge is $32.07 for in-town customers and $62.54 for out-of-town customers.
▪ Property tax rate: No increase. The tax rate is 58.7 cents per $100 in assessed property value, for a $2,054.50 bill on a $350,000 home. Hillsborough homeowners also pay county taxes.
▪ Fire service: $2.3 million for Orange Rural Fire Department fire service — includes an 8% increase for salaries — and county fire inspection services. $225,000 for a future fire station at 604 and 618 N. Churton St., next to Steve’s Garden Market and Butchery.
▪ Big takeaways: Employee merit raises averaging 3.25%, plus a $1,000 cost-of-living increase; and several new town employees, including a planner, a public works equipment operator, and two police officers. Waterstone Drive will be repaved, and $4.5 million will pay to relocate Public Works to a new facility on N.C. 86 North.
▪ Budget link: tinyurl.com/22djktzu
▪ The vote: 5-0, unanimous
This story was originally published June 8, 2023 at 6:21 PM.
