Proposed city budget, as expected, pushes taxes up a bit
City Manager Tom Bonfield formally asked elected officials Monday to enact a fiscal 2014-015 budget that requires about a 2.3 percent increase in Durham’s tax burden.
The manager’s budget proposal is in line with briefing documents that surfaced last week and would raise the property tax rate by 1.29 cents per $100 of assessed value, an increase that would cost the owner of a $150,000 house another $19.35 annually.
Bonfield said the city’s budget analysis remained stable over the course of the winter and early spring.
The tax increase is to cover rising debt payments and the need to pick up the check for police and firefighting positions that until this year had been covered by federal grant payments.
“There have not been significant changes in things since we had the budget workshops and retreats” with the City Council and residents early in 2014, he said.
Early indications were that even a 1.29-cent increase in the tax rate would leave the budget about $4.3 million out of balance.
But the staff’s initial estimates are done without knowing what state analysts will predict in the way of sales-tax growth, and use assumptions about spending growth that may or may not prove out.
As work unfolded, the sales-tax numbers “were a little better than we thought,” and departmental spending didn’t go up as much as projected, Bonfield, adding that he and his senior staff also made $1.6 million in cuts to make up the difference.
As Bonfield signaled last week, the proposed budget leaves it up to the City Council whether to repeal Durham’s year-old, $1.80-a-month household trash-collection fee, and whether to increase spending on parks maintenance.
Those initiatives could add another 1.07 cents to the tax rate, assuming the council adds both without finding cuts elsewhere to offset them.
For employees, the request provides for salary increases that will average 3 percent across the civilian workforce and about 3.5 percent for sworn police and firefighters.
The upcoming fiscal year will mark a return to a “differentiated pay-for-performance plan,” with salary increases based on a worker’s annual job evaluation, Bonfield said.
That system’s been on hold since the 2008 recession, when workers went a couple years without annual salary increases, then got bonuses and finally across-the-board increases.
The budget envisions eliminating four existing positions, freezing another that’s vacant and adding eight new jobs. Two positions in line for elimination are filled, meaning the people holding them have to find new jobs with the city or look for work elsewhere.
The eliminations include the Solid Waste Management Department’s waste-reduction coordinator, on the grounds that more-senior officials in the department are spearheading work on what to do about food waste, shredded paper and obsolescent electronics.
On the revenue side, the city’s numbers indicate that the various tax-law changes the N.C. General Assembly enacted last year had little effect, at least here, on municipal finances.
State legislators among other things eliminated franchise taxes on electric and gas utilities, but broadened the list of items subject to the consumer sales tax. When all was said and done, the changes added $626,867 to the city’s revenue base.
Overall, Bonfield is asking the council for $386.7 million in spending authority, 2.7 percent more than in fiscal 2013-14. Those figures count things like the Water Management Department, which relies on the revenue from water and sewer fees, not taxes.