Orange County reduces spending to limit pending property tax hike

The story was updated following the Orange County Commissioners vote on June 17, 2025, to approve the budget.

Orange County property owners may face a smaller tax bill increase than expected after the county commissioners cut over $40 million from the proposed budget.

The $306 million budget eliminates or delays $5.8 million in operating expenses and $34.2 million in capital spending, including for parks and school projects.

It sets the property tax rate at 63.83 cents per $100 in assessed value.

The new tax rate is 1.76 cents less than County Manager Travis Myren suggested in May. It will generate a $3,191.50 county tax bill for the owner of a $500,000 home.

The commissioners voted to approve the budget June 17.

This has been “the most difficult budget year since I’ve been a commissioner,” because of revaluation, plus federal and state cuts, Commissioners Vice Chair Jean Hamilton said at a June 3 work session. She said she focused on school projects, investments in the county’s future, and programs supporting “the most vulnerable residents” in making her budget choices.

“There will be sacrifices that our community, I think, is going to be asked to make. However, unlike President Trump’s budget, my view is we’re not going to ask those with the least resources to make the greatest sacrifices,” Hamilton said.

One of the largest cuts removes $9.9 million for school construction and repairs, part of a $100 million “pay-as-you-go” investment that was planned for the next 10 years. The money is meant to supplement a $300 million construction bond voters approved in 2024.

Bonds generate debt, while pay-go money is included in the county budget.

Funding for school projects cut

On May 29, Chapel Hill-Carrboro School Board Chair George Griffin called the proposed cut “a stunning development that has not been properly communicated to our board or the public after years of productive collaboration and community engagement.”

It undercuts bond project planning and design and “erodes public trust,” Griffin told the commissioners.

“Residents who voted in favor of the bond package in November 2024 did so with the understanding that it was part of a comprehensive, multi-pronged funding strategy,” he said. “Weakening the pay-go component creates a perception of a bait-and-switch where voters feel they were promised one thing but delivered another.”

The pay-go funding was not part of the bond package, the commissioners emphasized. Commissioner Phyllis Portie-Ascott called the cut “an opportunity ... to blunt some of the impact of the multi-level tax impacts we are seeing this year.”

“Another upside for this amendment is it smooths out the tax impact of revaluation, coupled with the schools capital plan, across several years, providing time for the homeowners to adjust their budgets,” she said.

Only Commissioner Amy Fowler voted no.

“I feel this jeopardizes the extent of the possible school construction and renovation and also negatively impacts the revenue-to-debt model, and will cause a higher or larger increase next year of 4-plus cents, which may lead to similar concerns and potentially similar decreases next year that may further erode the potential construction,” she said.

Limited increase for education

The budget allots $111.3 million to local schools, including $64.75 million for CHCCS and $46.6 million for Orange County Schools. That’s a total of $5,877 per student — a $211 increase — but only a portion of what the districts requested to cover staff pay and benefits.

Fowler pressed for a 0.76-cent increase in the city schools district tax rate to help, but the commissioners chose to increase the special tax rate by only half that amount. Only homeowners in the Chapel Hill-Carrboro City Schools district pay the tax, which brings in nearly $29 million.

A number of residents told the commissioners they were willing to pay more to support schools and social programs, Portie-Ascott said on June 3. But the county has to think about all taxpayers, including those struggling to pay, she and others said.

“That generosity really does mean a lot, and I only wish that our budget process worked … in a way that allowed those who were willing to contribute more to do so directly,” Portie-Ascott said.

Myren has warned that state and federal budget negotiations could necessitate another look at the budget later this year. Orange County gets over $20.6 million in federal money, representing 7% of its general fund budget. Most of that money pays for affordable housing and social services, including Medicaid payments and food and nutrition programs.

Another $15.8 million in federal funding supports school district programs that provide food for students; resources for students with disabilities, Head Start and pre-K classes; and professional development and staff support.

Orange County budget details

This story was originally published June 10, 2025 at 8:16 AM.

Tammy Grubb

The News & Observer

919-829-8926

Tammy Grubb has written about Orange County’s politics, people and government since 2010. She is a UNC-Chapel Hill alumna and has lived and worked in the Triangle for over 30 years.