Raleigh taxpayers could see smaller budget, higher taxes. Here’s why.
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- Raleigh proposed a 1.7 cent increase to boost stalling property tax revenue.
- Proposed budget is about $1.76 billion, roughly a 1% drop from $1.78 billion.
- If both pass, a $391,000 home would pay about $145 more, totaling nearly $3,550.
Raleigh’s city manager proposed a smaller budget Tuesday that cuts spending but raises the tax rate to counter stalling property tax revenue.
City Manager Marchell Adams-David’s proposed fiscal year 2027 budget of $1.76 billion is about 1% less than this year’s budget of $1.78 billion.
But it contains a tax rate increase of 1.7 cents per $100 of assessed property value.
The new tax rate of 37.2 cents per $100 would give the owner of a $391,000 home, the median assessed value in Raleigh, a city property tax bill of $1,454.50. That’s a nearly $67 increase.
Combined with an average of almost 5% in increases in fees for solid waste, water and sewer services and stormwater services, a resident could see a total increase of $122 to annual bills from the city.
The proposed budget includes 23 new police officer positions and a dozen new firefighter positions, but it eliminates 45 currently vacant city positions and holds vacant another 26 positions.
“The proposed budget protects our existing services while adjusting to the realities of the fiscal pressures we currently face,” Adams-David said in a news release. “It reflects difficult decisions, grounded in fiscal stewardship, that position Raleigh to sustain the high standards of service our community deserves.”
Wake County also considering tax increase
Meanwhile, Wake County Manager David Ellis has proposed raising the county’s tax rate 2 cents, to 53.7 cents per $100. For a $391,000-valued Raleigh home, that would add about $78 to the current Wake County tax bill of about $2,022.
If both tax rate increases are approved, they would result in a total city and county property tax bill of nearly $3,554.50, a roughly $145 increase.
Public safety
One of the largest increases in the proposed city budget, about $20 million, is for public safety. It would fund:
- 23 new police officer positions for around $3.8 million
- Three fire marshals, 12 firefighter positions and more funding for a second fire academy with a fire department budget increase of $3.31 million
- Six new 911-call operators for nearly $500,000
Other investments
- $2 million for cleaning and maintenance in city parking garages as well as keeping the two-hour free parking program in five garages
- Additional funds for minimum pay increases implemented in September 2025, initially costing $35.8 million, that are being fully implemented this year. Pay increases total between 11% and 14% in the proposed budget and last year’s budget. The increases were recommended in a staffing study to keep the city’s wages competitive.
- Over $600,300 for six new building safety positions involved in building permitting and inspection
What’s being cut?
“For the first time since at least the Great Recession of 15 years ago, the city is unlikely to experience any property tax growth in [fiscal year] 2027,” Adams-David told the City Council on Tuesday.
And property taxes are the city’s largest source of revenue, she said. The city relies on property tax revenue to consistently go up, but due to several factors, it’s not expected to this year.
The city expects to lose $6 million from the “Blue Ridge” loophole, Adams-David said, alluding to a company called Blue Ridge Housing that won a court case giving it a state-mandated affordable housing tax credit. A nonprofit owned less than 1% of the housing development, which was enough for Blue Ridge Housing to qualify for the tax credit.
Other tax exemptions and appeals to property tax revaluations are also costing the city millions. Wake County’s last property revaluation, effective in 2024, saw residential property values rise by an average of 53% since the previous revaluation in 2020. Thousands of property owners appealed, and in April city officials said many of those cases have yet to be resolved, placing another $125 million of Raleigh’s tax base in limbo.
“We started with a tax rate increase of a lot higher than two cents,” said city Budget Director Sadia Sattar.
But the proposed budget makes spending cuts to have a more modest tax rate increase, including:
- 45 currently vacant positions, all outside of public safety, saving $3.5 million
- Holding 26 positions vacant for the beginning of fiscal year 2027 saving $1 million
- Changing retirement medical benefits for new employees, requiring five more years of service for qualification, which saves around $1.5 million
The process
Raleigh will hold a budget public hearing at 7 p.m. June 2 in the City Council chambers at the municipal building on West Hargett Street. The council will hold budget work sessions every Monday beginning June 1 until the budget is passed, which must be done before the start of the new fiscal year July 1.
This story was originally published May 19, 2026 at 2:38 PM with the headline "Raleigh taxpayers could see smaller budget, higher taxes. Here’s why.."
