Durham city budget estimate assumes tax increase

Feb. 19, 2014 @ 10:40 PM

City Manager Tom Bonfield is launching his government’s fiscal 2014-15 budget debate with the assumption he’ll have to ask for an increase in the city’s property tax rate.

Initial projections suggest the city will need more money to pay off debt and make up for the expiration of federal grants that’d covered the salaries of 16 police officers and 15 firefighters.

The city budget staff is assuming Bonfield will seek a 1.29-cent increase in the city’s tax rate on every $100 of assessed property value.

That would cost the owner of a $150,000 house an additional $19.35, directly or through a mortgage escrow.

But the projections as they stand suggest the city would still be about $4.3 million short of producing a balanced budget for fiscal 2014-15.

Such gaps are entirely routine at this early stage of town and city budget debates in this state, and most always shrink as officials sharpen their revenue estimates.

“I feel like that’s going to get better, and we’re usually pretty conservative about that at this point,” Bonfield said.

By comparison, the city started last year’s budget debate with an estimated $5.2 million gap between projected revenues and expenses. Administrators and the City Council wound up balancing the 2013-14 budget without a tax increase.

They did, however, institute a $1.80-a-month fee for household garbage collection.

The current gap is already better than officials were thinking it might be this time a year ago. The city’s five-year fiscal forecast last spring reckoned officials would face an $8.0 million shortage headed into 2014-15.

It predicted general-fund expenses of $181.7 million.

But the latest estimates, produced for a council meeting today, are that the city will receive $174.9 million and spend $179.2 million in 2014-15.

The spending numbers assume the council will increase cash allocations to street paving and facility maintenance, award civilian workers raises averaging 3 percent and give police and firefighters raises averaging 3.5 percent.

They also do not assume any major change in budget priorities.

Ideas like the “penny for parks” tax earmark proposal the council is receiving today are not in the current estimate, Bonfield said.