Orange County manager seeks hefty tax hike to pay rising costs, construction debt

Orange County commissioners agreed Tuesday to look for spending cuts after seeing the tax increase being proposed to cover higher costs and pending school and county construction debt.

The county is still navigating state and global economic uncertainty, County Manager Travis Myren said, including rising fuel prices, supply-chain disruptions, no state budget, and pending legislation that could affect property taxes that fund local programs.

Local conditions are stable and more predictable, he said, noting Orange County’s relatively flat sales and property tax revenue growth.

The manager’s proposed $325.1 million budget is aimed at supporting schools, public safety and the social safety net, Myren said. It includes $127.5 million for county construction and operating costs, and another $148.4 million for local school operations and construction projects.

The budget is balanced with $7 million from the county’s fund balance — money left over after the bills are paid — and a tax-rate increase of 3.75 cents per $100 of assessed property value.

The new, proposed tax rate would be 67.58 cents per $100, or an extra $187.50 for the owner of a $500,000 home — for a total county tax bill of $3,379. Carrboro, Chapel Hill and Hillsborough property owners also pay a town tax and, in Carrboro and Chapel Hill, a school district tax.

Can commissioners find more savings?

Commissioners briefly discussed how they might reduce the proposed tax-rate increase or not pass one at all this year. Commissioners Jamezetta Bedford and Sally Greene advocated for the board to make the final decision about budget cuts.

Myren “has presented as bare bones of a budget as he can,” Greene said. The rest is “our job,” she added.

Commissioner Earl McKee, who has been warning the board about potential tax increases for the last year, argued for also hearing Myren’s suggestions. Steep budget cuts made after the 2009 recession “were met with hair on fire, predictions of doom and gloom and total collapse of this whole system,” he said, but the county got through it.

“This is not of our making, but it is something we’re going to have to deal with, and I’m not so sure that this board is not going to have to deal with it again next year, because I don’t think the feds or the state’s done with us, and I am extremely leery of the economy,” McKee said.

Myren agreed to bring options to a future meeting, but warned additional cuts could hit discretionary services, such as libraries and parks. The commissioners also have until May 27 to offer their own budget amendments.

Other key changes in budget

• Chapel Hill Public Library: The county now pays $621,323 a year to support the library under a 2012 agreement, but the Southern Branch Library is now open at the Drakeford building in Carrboro. That library costs about $943,221 to operate.
• The county proposes paying $310,662 to Chapel Hill next year and ending the agreement in 2027-28. The Friends of Chapel Hill Public Library is mustering opposition, noting the proposed cut this year is roughly 72% of Chapel Hill’s library operating cost.
• Suspending the Step Program would save $410,000. It gives a raise based on years of service to Social Services, Emergency Services and Sheriff’s Office employees.
• Four of 12 rural fire departments — Damascus, Eno, Little River and South Triangle — asked for a fire district tax increase.

What about the schools?

• $114.1 million for Chapel Hill-Carrboro and Orange County school district operations. That’s an increase of $294 per student, or a total of $6,171 each in local funding.
• Chapel Hill-Carrboro schools would get $66.3 million — over $5 million less than the district sought. CHCCS also gets over $30 million from a special tax charged to property owners in the district.
• Orange County Schools would get $47.8 million — over $2.8 million less than the district sought. Property owners in the county school district do not pay a district schools tax.
• Capital spending: The districts could build four new elementary schools over the next decade using a $300 million bond that voters approved in 2024, plus $100 million in pay-go funding — cash from the county’s budget. However, the proposed budget only includes $3.5 million in pay-go funding, marking a second year that the county has not fully funded its pledge.

County adding construction debt

In addition to school construction debt, the county’s draft $150.8 million capital improvements budget also includes $29.5 million for county projects. It’s the first installment in a 10-year, $871.6 million capital budget plan.

Myren has warned debt could consume over 19% of the budget by 2032 and add up to 10 cents to the property tax rate. Projects include:

• $118.5 million for EMS headquarters and substations, 911 backup center, VIPER radio system, and public safety vehicles.
• $21.6 million for a county recreation center
• $15.5 million to renovate the Link Center and relocate the sheriff’s office.
• $15 million for affordable housing.
• $3.7 million for a day center with cold weather cots in Chapel Hill.
• $3.9 million to renovate the Justice Facility in Hillsborough for other uses.

What about county employees?

• County employees could get a 2% raise next year. The county’s living wage would grow to $20.02 an hour.
• New hires: Existing money could pay for a county transportation driver, Health Department deputy director, and behavioral health director. The budget cuts 13 jobs, freezes five vacant Sheriff’s Office positions, and saves for future tax office changes.

What’s next?

Community meetings: The county is holding three drop-in budget sessions.

• May 14, 6-6:45 p.m., Whitted Human Services Center, 300 W. Tryon St., Hillsborough
• May 20, 6-7 p.m., virtual session via Microsoft Teams at orangecountync.gov/BudgetSession
• May 21, 6-6:45 p.m., Southern Human Services Center, 2501 Homestead Road, Chapel Hill

Public hearings: May 12 at the Whitted Building in Hillsborough, and May 28 at the Southern Human Services Building in Chapel Hill. Meetings start at 7 p.m.

Budget approval: Commissioners could vote on amendments and a resolution to approve the final budget June 4. A budget vote is set for June 16.

More information: Orangecountync.gov/AnnualBudget

This story was originally published May 6, 2026 at 5:30 AM with the headline "Orange County manager seeks hefty tax hike to pay rising costs, construction debt."

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.