Orange County commissioners’ good deed goes undone in new budget

The Orange County Board of Commissioners was trying to do something good by trimming a little off the Chapel Hill-Carrboro City Schools tax rate last week – but it wasn’t legal.

The county is required to provide local money to the city and Orange County Schools districts based on their number of students. However, taxpayers who live in Chapel Hill and Carrboro also pay a special district tax that provides over $20 million more to those schools.

When the commissioners realized they had an extra $112,000 in the 2017-18 county budget, they substituted that money for some special district tax revenues and passed the savings – although minor – to those taxpayers.

But county money must be shared equally among all local students. It wasn’t, and that violated the statewide policy.

The commissioners rectified the mistake Tuesday in voting to approve the $219.6 million county budget, which keeps the special district tax at its new revenue neutral rate of 20.18 cents per $100 in property value. The revenue-neutral rate is designed to generate the same property tax revenue as before the recent revaluation.

The approved budget also sets a countywide property tax rate of 83.77 cents per $100 in value. The county tax bill for the owner of a $300,000 home will be $2,513.10. The owners of a similar home in Chapel Hill and Carrboro will pay an extra $605.40 in schools taxes.

Although Commissioners Chairman Mark Dorosin argued the money could be used instead to lower the county tax rate, the commissioners voted 6-1 to put it back in the county’s pocket.

Commissioner Barry Jacobs suggested they talk in the future about how to narrow the funding gap that the district tax creates between the school systems.

This story was originally published June 21, 2017 at 9:55 AM with the headline "Orange County commissioners’ good deed goes undone in new budget."