Chapel Hill and Carrboro budgets raise taxes. Both towns faced tough choices.
UPDATE: The story was updated June 23, 2025, with the approved budgets for Chapel Hill and Carrboro.
Chapel Hill homeowners could pay more property taxes to help the town “hold our ground” in a complex year, interim Town Manager Mary Jane Nirdlinger said Wednesday.
It’s expected to be “an unpredictable next couple of years,” she said.
But first, the Town Council had a hard conversation about how much of an increase property owners can expect and what programs and services could be cut to reduce the impact.
Carrboro and Orange County elected officials had a similar conversation with their managers Tuesday night.
Nirdlinger’s $164.1 million budget, 5% higher than this year’s budget, dedicates roughly $95 million to daily operating costs, the bulk of which covers employee salaries and benefits. Town staff will get a 5% pay raise.
The approved tax rate of 50 cents per $100 in property value is 5.8 cents above the revenue neutral tax rate of 44.2 cents set in the county revaluation earlier this year. The revenue neutral rate — a starting point for budget discussions — ensures local governments get at least the same amount of money from the new tax values as they did last year.
While property values doubled and even tripled for many homeowners, sales tax revenues are down, Nirdlinger said.
The proposed budget marks a turning point after years of work to strengthen the town’s financial situation, she said.
“To do nothing will weaken our organization at a time when people rely on us for summer camps, affordable housing, and basic services,” she said. “Staying at the status quo will require cuts beyond those we’ve identified, and further reductions would mean service changes,” from closing the library one day a week to “incurring serious and escalating costs into the future.”
The proposed budget would whittle away at a backlogged needs, increase transit funding, add a public restroom downtown, buy software and equipment, support services and programs, and maintain vehicles, fields and facilities.
Council members acknowledged the difficulty of the situation, including the uncertainty about what the federal government will do and how to keep working through the backlog that piled up as previous councils held the line on property tax rates.
Last year, the council approved a 5-cent tax rate increase — the largest since at least 2009 — to start meeting roughly $60 million in delayed maintenance, repairs and big-ticket purchases..
The situation facing residents who saw hefty increases in home values this year is very concerning, but asking town staff to do more with less would be unfair, Council member Amy Ryan said.
“I think we may have to take a hard look and have some more discussions about the things we’re choosing to do and what we can afford and what we can’t,” she said.
Council members Elizabeth Sharp and Paris Miller-Foushee encouraged residents to tell the council what they can do without.
Sharp also asked staff to bring more information to the next meeting about potential tradeoffs. The council has gotten a lot of emails about how the revaluation and the potential tax rate could affect people’s ability to stay in their homes, she said.
“We are a community with a big heart, and we very much want to actualize our compassion, but it costs money,” Sharp said. “At the same time, as a business owner, I’m acutely aware that the place that that money comes from is the maintenance of a valuable asset, which is the functioning town of Chapel Hill.”
What to know about Chapel Hill’s budget
Previous town tax rate: 59.2 cents per $100 in assessed value
New town tax rate: 50 cents per $100 in assessed value
CHCCS district tax rate: 14.79 cents per $100 in property value
Orange County tax rate: 63.83 cents per $100 in property value
Total tax bill (town, county and schools): $7,717.20 for a $600,000 home
Read the budget: tinyurl.com/e488z9ed
What to know about Carrboro’s budget
Carrboro residents also could see their property taxes go up this year to balance the budget and pay for affordable housing projects.
Town Manager Patrice Toney recommended a 56.5-cent property tax rate — up 9.7 cents from the revenue neutral rate of 46.8 cents per $100 in assessed property value.
The proposed tax rate would generate a $2,543.85 town tax bill for the owner of a $450,000 home.
Chief Finance Officer Chaz Offenburg said Carrboro’s proposed $62.5 million budget strikes a balance between long-term priorities and current fiscal challenges.
It’s a small decrease from the current budget, but includes a 12% increase to $36.7 million in daily operating costs, he said. The town’s biggest expense is its employees, who could see a 5% raise next year. Council members will get the same raise, which Council member Jason Merrill encouraged his fellow members to donate to charity.
The budget would be balanced with $3.8 million from the town’s fund balance, which is money left over after the bills are paid. Some of that money will offset a larger tax rate increase, Offenburg said.
The council voted 6-1 to approve the budget. Council member Randee Haven-O’Donnell voted no after asking the council to pass on its raise and delay the vote to June 17.
Previous tax rate: 60.44 cents per $100 in assessed value
New tax rate: 56.5 cents per $100 in assessed value
CHCCS district tax rate: 14.79 cents per $100 in assessed value
Orange County tax rate: 63.83 cents per $100 in assessed value
Total tax bill (town, county and schools): $5,580.40 for a $450,000 home
Read the budget: carrboronc.gov/250/Financial-Documents
This story was originally published May 8, 2025 at 10:18 AM.
