Raleigh Report

Raleigh OKs budget with tax hike, raises for city workers

Council members, from left, David Cox, Russ Stephenson, Corey Branch, Kay Crowder, Mayor Nancy McFarlane, Bonner Gaylord, Dickie Thompson and Mary-Ann Baldwin discuss business as the Raleigh City Council meets on Dec. 1, 2015.
Council members, from left, David Cox, Russ Stephenson, Corey Branch, Kay Crowder, Mayor Nancy McFarlane, Bonner Gaylord, Dickie Thompson and Mary-Ann Baldwin discuss business as the Raleigh City Council meets on Dec. 1, 2015. cseward@newsobserver.com

Residents will pay a higher property tax rate and most city employees will get raises under a spending plan approved by Raleigh leaders.

The Raleigh City Council on Monday voted unanimously to adopt a $919.1 million budget that introduces a new wage structure that will boost pay for most of the city’s 4,000 employees.

To help pay for the plan, the council raised the property tax rate by 0.7 cents to bring it to 42.5 cents per $100 in valuation.

The owner of a $195,154 home – the median home value in Raleigh – will pay an extra $13.68 in property taxes next year. Water and sewer bills will rise by 3 percent to improve the city’s infrastructure, and the monthly solid-waste fee will increase by 75 cents.

The budget mostly resembles the plan proposed last month by City Manager Ruffin Hall, and marks the third year in a row the council has raised the property tax rate.

Last year, the council approved a 2 cent boost to the property tax rate, using the $11.4 million in additional revenue to fund more affordable housing units and pay for Dix Park. In 2015, the council raised the rate by 1.72 cents to fund debt for parks.

Less than a week ago, the council agreed to place a $206.7 million bond referendum on the ballot this fall. If voters approve the measure, Raleigh will raise the property tax rate by 1.3 cents in the next few years to pay for road and sidewalk projects. The tax rate hikes associated with the referendum would likely go into effect incrementally.

Mayor Nancy McFarlane said the tax increases are needed so Raleigh can serve a growing population and offer competitive salaries.

“As somebody that’s run a business, I can tell you that retaining good employees is a great investment,” McFarlane said. “If you have employees that are doing a great job, you want to make sure you can keep them as part of your organization.”

Unlike last year’s budget discussions, the talks this year did not spur much controversy.

Advocates for police and fire department workers picketed City Hall for higher pay last year, saying they were underpaid compared to public safety workers in similarly sized North Carolina cities and other Wake County towns. The council granted all employees raises of between 3 percent and 3.5 percent but said it would likely grant bigger raises after consultants studied the city’s wage structure.

Consultants completed their study this winter, finding that the city’s salaries were generally lower than similar-sized cities. So City Manager Ruffin Hall in February boosted salaries for 2,100 city positions, including raises from 6 percent to 13 percent for public safety workers.

The budget adopted Monday goes even further. Once implemented in July, the plan will pay entry-level firefighters a county-high $39,200 and entry-level police officers $42,300, which the city says is the second highest starting wage in Wake.

Shawn Burns, president of the Raleigh Professional Firefighters Association, said he’s encouraged that the city wants to help public safety employees out of a hole that Raleigh started digging years ago.

“Public safety’s been looked over for 10 years or more, and pretty much everything we’ve gotten in a cost-of-living raise has been eaten up by increased taxes or insurance premiums,” Burns said. “They’ve committed to doing more this year than in all those years past.”

The association is still waiting to see how each employee is affected by the budget, he said. Each employee will know how his or her pay is affected by July 23, he said.

Hall’s budget proposal received little criticism at a public hearing on June 6. Raleigh resident Joey Stansbury said the city could fund employee raises without raising property taxes.

The tax increase will generate $4.1 million more each year, so Stansbury offered 18 ideas the city could adopt to save that amount of money. Raleigh could save $1.7 million by scrapping its police body camera program, $800,000 by foregoing renovations to City Plaza and it could generate $500,000 by eliminating the free R-Line bus service.

“Police officer and firefighter raises are not driving these increases. Rather it is a result of bad budgeting decisions – past and present,” Stansbury said. “Reasonable cuts in wasteful programs, not essential services, would allow Raleigh to deliver raises to its public servants.”

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