Orange County to raise taxes for climate change but plan for school funding gap fails

Orange County Commissioners Chair Penny Rich on the 2019-20 budget

The Orange County Board of Commissioners advanced a $237 million operating and capital budget on June 11, 2019, that includes over $140 million for Orange County and Chapel Hill-Carrboro City schools. The board will vote on the final budget June 18.
Up Next
The Orange County Board of Commissioners advanced a $237 million operating and capital budget on June 11, 2019, that includes over $140 million for Orange County and Chapel Hill-Carrboro City schools. The board will vote on the final budget June 18.

Update: The Orange County Board of Commissioners approved the 2019-20 fiscal year budget on June 18. The budget and a 1.75-cent tax rate increase will take effect July 1.

Orange County property owners will pay higher taxes next year to cover school construction debt and fight climate change, but they won’t have to pay the county commissioners more to do their jobs until 2020.

By a 6-1 vote Tuesday night, the Orange County Board of Commissioners gave preliminary approval to a $237.1 million budget with a 1.75-cent, or 2%, property tax rate increase. The final vote will be June 18 after a public hearing.

“I think we had some real robust conversations tonight about different parts of the budget. Overall, I think the budget is fair and balanced, which we always try to do,” Commissioners Chair Penny Rich said.

The increase takes effect July 1 and is slightly more than County Manager Bonnie Hammersley recommended in her fiscal year 2019-20 budget proposal. Roughly half of the county’s budget pays for school operations and capital projects.

The county’s new property tax rate would be 86.79 cents per $100 in property value. That would generate a $2,603.70 county tax bill for the owner of a $300,000 home — a roughly $52.50 increase. A penny on the county’s tax rate brings in nearly $1.9 million.

Commissioner Earl McKee voted against the budget, citing concerns about a new, quarter-cent tax rate increase to fight climate change and a pay increase for the commissioners.

More tax increases are possible through 2022, as the county pays off construction projects and a $120 million school bond. Hammersley has offered two options for dealing with the county’s debt: gradually adding up to 9 cents to the property tax rate, and levying a larger tax rate hike now and banking the extra money for future debt.

Property owners in Chapel Hill, Carrboro and Hillsborough also pay town property taxes and, in the Chapel Hill-Carrboro school district, a schools property tax. The commissioners did not change the school district tax rate.

The Chapel Hill Town Council could approve a budget Wednesday night that includes a 1.6-cent tax rate increase for affordable housing and construction debt. Carrboro’s aldermen could vote June 18 on a half-cent tax rate increase to support affordable housing.

Hillsborough’s Town Board approved a budget Monday that maintains its property tax rate but raises monthly water and sewer rates.

Fair schools funding

The commissioners rejected three tax rate proposals Tuesday before reaching a decision, including one from Commissioner Mark Dorosin that would have slightly narrowed the local funding gap between the county’s two school districts.

Two others — from Rich and Commissioner Jamezetta Bedford — would have respectively increased the county’s property tax rate by 4.30 cents this year or added a penny in taxes to support local schools.

The county allocates 60% of its school funding to the Chapel Hill-Carrboro City Schools district, based on its public and charter school enrollment. Orange County Schools get roughly 40%. Next year, each district will get $4,352 per student from the county.

But the city schools also benefit from a special tax in that district. The tax — 20.18 cents per $100 in assessed property value — adds $605.40 to the tax bill for the owner of a $300,000 home and generates $24 million for city schools. That’s in addition to next year’s $53.4 million county budget allocation.

Residents in the county schools district don’t pay the special tax, so those schools only get county money — $35.4 million in 2019-20. As a result, the Chapel Hill-Carrboro district has roughly $2,000 more to spend on each student.

Dorosin, who has raised the issue for several years, proposed the commissioners cut the district tax rate by a penny and add just over a penny for both school districts to the county tax rate. The plan would have funded the city schools at roughly the same amount but increased the county schools budget by $800,581.

It’s a first step toward providing equal funding and educational opportunities countywide, he said. Orange County already budgets more per student than any other county in the state.

“The fact is I don’t believe it costs $2,000 more per student to educate a student in Chapel Hill than it does to educate a student in Orange County,” Dorosin said.

“In fact, given the demographic changes that are happening in Orange County — where we’re seeing much higher percentages of low-wealth students, we’re seeing increased racial segregation in the schools, and we’re seeing (as a result), white flight to charter schools — there’s very important and good reasons to increase the amount of money that’s going to the Orange County Schools,” he said.

Dorosin got wide support for narrowing the funding gap, but some commissioners drew the line at levying more taxes on residents who already are being priced out of the county. McKee challenged the fairness of Dorosin’s plan before choking on his words as he addressed school board members in the audience.

Dorosin’s plan doesn’t change anything for Chapel Hill-Carrboro taxpayers, McKee said, but county residents will pay more for only a 40 percent share of the additional schools funding. He then proposed — and the board approved — giving the districts another $250,000 slated for the county’s retiree benefits fund.

It might be the last time he supports more money for the schools, McKee said.

“Until and unless these school boards address the disparity in (student) outcomes and the flight in Orange County Schools to charters, I could very well quit supporting any more money for the schools,” he said. “Chapel Hill has the highest disparity in the nation, and at $6,000 per student, that is abominable. Orange County, you’ve got 10 percent of your students in charters. You better start addressing it.”

Commissioner pay, benefits

The commissioners also raised their $22,940 base salary to be more in line with what Durham and Wake commissioners earn and added $37 to their monthly cell phone and Internet service allowance, up to $160. Orange County also gives its commissioners $1,000 in merit pay each year, a $200 monthly car allowance, and access to county health and retirement benefits.

However, the board’s current base salary of $23,591 — the board’s chair and vice chair earn a little more — won’t increase until 2020.

Outgoing Commissioners Mia Burroughs and Barry Jacobs proposed the pay increase last year as a way to attract a more diverse pool of commissioners, including those with full-time jobs, Rich said. Support for the move among current board members was lukewarm.

Commissioners Jamezetta Bedford and Sally Greene, who joined the board in December, declined to support a pay raise so soon after being elected. Any increase should be delayed until after the 2020 election, Greene said.

Bedford and McKee voted against the commissioners’ salary increase.

Climate change action

A quarter-cent tax rate increase will provide the county with $469,272 each year to fight climate change. Commissioner Mark Marcoplos proposed the increase in late May.

Some residents in the audience held up signs as he and other commissioners spoke, asking them to reject the tax rate increase. Other residents wore green and held signs in support of the climate change action.

“There are young people all around this county that are hoping that the adults will step up and take some action and not just watch the news and moan and groan about it,” Marcoplos said. “There’s another benefit. The type of economic development that we want in this county is clean and green, and to the extent that we brand ourselves as alternative energy providers and a county that really focuses on the sustainability issues that come with climate change, we will attract those kinds of businesses.”

The rate increase was approved 4-3, with Commissioners McKee, Bedford and Renee Price voting against it. A last-minute amendment by Greene will let the commissioners prioritize the projects and also address social and racial equity issues.

Learn more about the climate change action plan at tinyurl.com/y4sa27ac.

Budget highlights

Solid waste and recycling customers will pay $142 next year, an increase of $10. The county expects to raise the fee to at least $148 by 2020-21 to cover costs.

Homeowners served by the Damascus and Southern Triangle fire departments will pay an extra half-cent next year in fire district taxes. Homeowners in the White Cross fire district will pay an extra penny. The increase will help hire part-time staff to supplement declining volunteers.

Roughly $48 million to address construction and renovation projects at several county buildings. Includes $20 million in 2016 voter-approved schools bonds, largely for a $14.5 million project adding 25 classrooms and a new wing to Cedar Ridge High School.

County employees get a 2 percent raise. All full-time employees earn a “living wage” of at least $15 an hour, and temporary employees will get $14.95 an hour next year, up from $14.25 an hour.

Related stories from Durham Herald Sun

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 25 years.