Raleigh Report

Raleigh budget plan: tax hike for residents, raises for police and firefighters

Big pay raises for city employees in proposed city budget

Raleigh City Manager Ruffin Hall explains why his proposed budget for the next fiscal year includes big raises for city employees.
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Raleigh City Manager Ruffin Hall explains why his proposed budget for the next fiscal year includes big raises for city employees.

Residents would pay more in taxes and fees and city workers would get raises under a proposed spending plan for Raleigh.

City Manager Ruffin Hall is proposing a $918.9 million budget for the fiscal year that starts July 1 – a spending increase of $59.9 million from this year. He suggests raising the property tax rate by 0.7 cents to bring it to 42.5 cents per $100 in valuation.

Hall said the plan is part of a broad effort to make the city government more attractive to current and potential employees. Raleigh would spend more than $14 million to adjust employee salaries, and 74 percent of that would go to police officers and firefighters.

“Everyone will get something,” Hall said of the city’s 4,000 employees.

The budget plan comes two months after Hall announced a mid-year pay adjustment for many workers, including those in public safety. It comes a year after some police officers and firefighters picketed outside City Hall, demanding big raises.

Hall’s proposal would make Raleigh a “regional leader” in starting pay for police and firefighters, he said. Entry-level police officers would make $42,300 a year, the second-highest rate among Wake County municipalities. Entry-level firefighters would make $39,200 a year, which would be the highest in Wake.

“This is a significant financial investment in our first responders that we expect will reduce police turnover rates and ensure our police and fire departments recruit and retain highly qualified individuals,” Hall wrote in his budget message.

Raleigh City Council members seemed generally supportive of Hall’s plan, which was presented Tuesday. Mayor Nancy McFarlane said she needs more time to review the proposal but that it appears to address the board’s goals.

McFarlane referenced a recent resident survey in which most people said they agree with the direction of the city, and said she thinks residents will understand the need for a tax increase.

“When it comes to supporting our first responders and making sure they’re paid in accordance with the market, I think people will support that,” she said.

Councilman Dickie Thompson said the pay boosts are a good investment because the city loses money when turnover rates are high.

“We’ve got to attract and keep good talent, instead of letting other cities come and take our folks from us,” Thompson said. “We do a lot of training and then they leave, and that really costs us a lot of money.”

If the council adopts Hall’s budget, this will be the third year in a row for a tax hike in Raleigh.

The council, a nonpartisan body mostly occupied by Democrats, last year approved a 2 cent boost to the property tax rate. The increase generated $11.4 million in additional revenue, which the council split between paying for Dix Park and funding more affordable housing.

In 2015, the council raised property taxes by 1.72 cents to fund debt for parks.

Under Hall’s latest plan, residents with homes valued at $195,000 – the median Raleigh home value – would pay an extra $42.48 next year in taxes and fees.

About $13.68 of that amount would come from the new property tax rate, while $28.80 (about $3.54 a month) would come from an increase in utility and trash-collection fees.

All residents would pay an extra $1.65 a month in utilities and an extra 75 cents a month for trash pickup.

Cary, Apex and Morrisville are the only Wake towns with a lower property tax rate than Raleigh.

Cary’s rate is 35 cents per $100 in value, the Apex rate is 38 cents, and Morrisville’s rate is 39 cents.

Asheville and Charlotte have property tax rates of 47 cents, while Chapel Hill, Durham, Winston-Salem and Greensboro all charge more than 52 cents per $100 in value.

Other costs

Hall’s proposal calls for taking $3.6 million from city savings for capital projects:

▪ $2 million for renovations to City Plaza, which council members discussed in March;

▪ $600,000 for improvements to the Marsh Creek Operations Center;

▪ $400,000 to help tenants move into the new Union Station transit hub;

▪ $250,000 for the the Midtown/St. Albans area plan;

▪ the remainder for new police and fire equipment.

The proposal would also fund:

▪ redesign of the city website;

▪ $1.1 million park-and-ride bus facility on Poole Road;

▪ 14 new positions that would “provide enhanced and new services to the development community.”

Paul A. Specht: 919-829-4870, @AndySpecht