If your property values grew significantly this year, you could pay more in Orange County taxes in 2017-18, while those who saw little to no increase could pay less.
County Manager Bonnie Hammersley reset the property tax rate as part of the proposed $217.8 million general fund budget she presented Tuesday to the Orange County Board of Commissioners. The commissioners are expected to adopt next year’s budget by June 20.
The budget includes an extra $3.54 million for the Chapel Hill-Carrboro and Orange County school systems – just over a third of the increases that district leaders requested last week. It raises per-student spending by $123 to $3,991 – higher than the average per student increase of $91.10 over the past 10 years.
The county is doing what it can, Hammersley said. She noted the increase would help meet expected state pay raises of 5 percent for teachers and 3 percent for other school staff.
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“It’s challenging,” she said. “A lot of people come to Orange County for the schools. It’s a great economic driver for the county, and with the resources, it’d be nice to be able to have more to give them, because I think it is important.”
She noted the commissioners could decide to give more money to the schools, either by reallocating available money or raising taxes.
The Chapel Hill-Carrboro School Board has recommended increasing a special tax charged to Chapel Hill and Carrboro property owners. Property owners in the county school district do not pay a district tax.
A penny on the revised school district tax rate would generate roughly $1.1 million, requiring an increase of nearly 3 cents to fully fund the city schools request. The commissioners also could raise the property tax rate by 3.5 cents to fully fund both school districts.
Hammersley’s proposed budget also gives county employees a 2 percent raise July 1 and offers them six weeks of paid parental leave.
She and Deputy County Manager Travis Myren noted that the 2017 revaluation, largely fueled by new construction, raised property values by over $1 billion. The increase was enough to cut the residential property tax burden from 84 percent to 80 percent and increase the commercial share of general fund revenues to 20 percent.
State law requires counties to reset property tax rates to “revenue neutral” following a revaluation, meaning they bring in the same amount of money. Hammersley’s proposed budget has a tax rate of 83.77 cents per $100 in property value – down from 87.8 cents.
The owner of house with a tax value of $250,000 would pay $2,094.25 in county taxes under the proposed plan.
The Chapel Hill-Carrboro schools district tax rate fell from 20.84 cents to 20.18 cents per $100 in value, adding another $504.50 to the $250,000 house’s tax bill.
Fire district tax rates also were adjusted.
The proposed budget is balanced with $7.8 million from the county reserves, or fund balance. That leaves the fund balance at 17 percent – the minimum that the county sets aside for emergencies or other unexpected needs, Hammersley said.
One penny on the county’s proposed new tax rate would be equal to $1,781,692 – nearly 6 percent higher than last year.
Previous budgets also have relied on money from the fund balance. Hammersley said county officials will have to decide what that means for future budgets.
“We’re going to be working really closely with our department directors to see where we can find efficiencies, where we can do collaborations, where there’s opportunities for reducing expenditures and not having to disrupt services,” she said. “But if that is the case, then we would bring that forward to the board for their decision whether we would do that.”
The budget also:
▪ Charges all county property owners $128 next year for solid waste and recycling services, up from $107
▪ Increases the county’s living wage – the hourly wage at which a family won’t pay more than 30 percent for housing – to $13.75 an hour. The living wage now is $13.15 an hour. The move adds roughly $101,000 to the budget. The county would study setting a $15 wage for all permanent employees by January.
▪ Adds $200,000 to expand the Orange Connect Scholarship Program to any resident who earns a General Equivalency Diploma and enrolls at Durham Technical Community College. The program already provides up to $1,000 annually to any high school graduate enrolling at Durham Tech.
▪ Adds $292,900 to affordable housing programs, including two employees to manage housing repair and rehabilitation work and to work with landlords to house the homeless, residents with federal housing vouchers and others.
The Orange County Board of Commissioners will hold two public hearings this month to discuss the 2017-18 proposed budget.
Both hearings begin at 7 p.m. The first will be held Thursday, May 11, at the Whitted Building, 300 W. Tryon St. in Hillsborough, and the second will be held Thursday, May 18, at the Southern Human Services Center, 2501 Homestead Road in Chapel Hill.
The commissioners are expected to adopt next year’s budget by June 20.