Property tax too high? How Chapel Hill council candidates might ease the burden

Homeowners and renters typically bear the brunt of local government expenses — historically at a higher cost in Chapel Hill because of fewer commercial taxpayers and higher home prices.

The town uses property tax revenues to pay nearly half of its bills, and homeowners shoulder roughly 72% of the burden. That’s down from an 80% residential tax burden in Chapel Hill about 10 years ago, before new businesses and apartment buildings increased the commercial share.

But falling sales taxes and the increasing cost of doing business in the last few years are putting pressure on the Chapel Hill Town Council to make service and program cuts or raise the property tax rate to make up the difference.

On Nov. 4, Chapel Hill voters will elect four of five council candidates to help address housing affordability and town needs. Early voting in the 2025 municipal and school board election begins Oct. 16 in Hillsborough and Oct. 23 in Carrboro and Chapel Hill.

The nonpartisan race features two incumbents — Camille Berry and Paris Miller-Foushee — and three challengers: Wes McMahon, Louie Rivers III and Erik Valera. Mayor Jess Anderson, who is also on the ballot, is unopposed.

Berry is the only candidate who rents her home, but as she and other candidates noted, the owners of apartment buildings pass their property tax bills on to their tenants through the monthly rent they charge.

The News & Observer asked each Town Council candidate to suggest two ideas to ease the growing tax burden on homeowners:

Camille Berry: Increase commercial revenue, and I don’t know that that’s easy, but that is going to be one that I believe will help us, and the second is finding ways to maintain what we have or to improve the systems that we have so we don’t have to dip into emergency funding.

We were fortunate that we had the resources to support our community after Tropical Depression Chantal. But … it’s the unexpectedness of [storms] that we can’t always plan for. What we can plan for is if we see trends in harm in our community — as far as stormwater, where does it go? Where are the floods likely to happen? Then taking action as far as we can.

I think we should stop going for perfection. We don’t always, but sometimes I worry that that’s what holds us back from implementing things, because we’re waiting [to know whether] this is the best practice.

Wes McMahon: The first idea I have is to make sure that we are making decisions based on data. It can be easy to sit here and say, there are things I’d like us to cut, things I’d like us to keep, but that’s kind of based on my opinion. I’d really like us to make sure that we have more data from all of our departments so that we can make evidence-based decisions.

The second thing we can do … is to look at our community partners and figure out who outside the town can help deliver resources in our time when we have reduced funding. For example, I think about the Partnership on Homelessness. We can work with the county to look at their funding capacity. We can look at our neighborhood churches and congregations, and look at their capacity for the use of space and financial resources. And we have tremendous nonprofits in this town, from PORCH to TABLE to Habitat to places I haven’t even mentioned.

Paris Miller-Foushee: When we grow as a town, our growth includes more commercial and more denser housing types that contribute to tax revenues that ultimately help to take the burden off of homeowners. We have to think about growth in our town in comparison to our neighbors — Cary or Morrisville or Durham or Raleigh. They’ve grown at about 20% to 30%, whereas in the town of Chapel Hill, we’re in the single digits. So there’s an appearance of a lot of growth happening within our town, because we have pushed a lot of that development and growth to our major corridors.

Another way in which we can continue to alleviate the tax burden is working with Orange County. I serve as a board member of the Marian Cheek Jackson Center, and we are creating a movement for an equitable tax valuation and assessment. We need to get to the root cause of a lot of the disparities that we see.

Louie Rivers III: The immediate thing that we can do is reduce the property tax rate. … We have a budget that’s proposed by a city manager, and we can ask the city manager to craft a budget or show us different options of a budget with reduced tax rates.

If you look at our budget, we do have lower revenues compared to the past fiscal year … but our costs are still there, and, of course, they’re higher because inflation is more than it used to be [and] a lot of those costs are fixed … so we have to think seriously about trade-offs. … [and] we need to do it in collaboration with our community.

The second thing in terms of reducing costs … I see development as something where you’re going to pay money to invest in the staff or maybe expand the staff, but the work that they do will improve your tax base. That better tax base will make things better for the people in your town.

Erik Valera: We need to look at the revaluation process. What we learned this cycle was that the revaluation process is inequitable, and this is based on a formula that needs to be looked at again — the idea that we have a single-family home where there are homeowners, and then next door, there might be an investment property, and the investment property pays less taxes than the owner-occupied home. It doesn’t seem equitable in the first place.

Part of strengthening our economy [also] means being able to build places where our workers live, closer to where they live, to where they work. If we’re able to bring more people into the town, if we’re able to grow our town, if we’re able to bring more businesses into the town, it will reduce our tax burden overall, and it will ideally also bring more visitors to our town.

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.