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Chapel Hill tax hike proposed

By Susan Dickson
Staff Writer
CHAPEL HILL – Town Manager Roger Stancil has proposed a half-cent property-tax increase as part of his recommended 2012-13 budget, which he presented to the Chapel Hill Town Council on Monday.

The increase would represent the town’s first property-tax increase in three years, bringing the rate to 49.9 cents per $100 of property valuation, up from 49.4 cents in 2011-12. Stancil said the proposed increase stemmed from increasing transit costs, and that it had been recommended by the Chapel Hill Transit partners.

The increase would cost an additional $10 for the owner of a $200,000 home, bringing that property owner’s town tax bill to $998 annually.

Overall, the town’s general-fund expenditures are up 3.7 percent, to $52.4 million from $50.5 million in 2011-12.

The proposed budget includes a 3 percent raise for town employees, who have not received a salary increase since 2008-09; the reinstatement of the town’s $43,000 July 4 fireworks event; no layoffs of full-time town employees; three months of expanded library operating costs, with the new Chapel Hill Public Library set to open in 2013; $361,000 in street-resurfacing funds; and $240,000 to finish work on the town’s fiber network. The budget also uses $1.6 million of fund balance, the town’s savings account.

Overall, Stancil said, the economy appears to be improving, noting an increase in sales-tax receipts in recent months.

“We are seeing signs of recovery after four bad years,” he said.

Additionally, Stancil said, the town saw a turnaround in health insurance costs this year, with a 3 percent decrease after several years of 10-plus percent increases. Nationally, health insurance costs are increasing by about 9 percent, and Stancil attributed the decrease in the town’s costs to its employees’ attention to health and safety.

However, Stancil said, transit expenditures are up 6.4 percent, from $18 million to $19.1 million, attributable to increasing fuel costs and a reduction in state funding.

“We really need to do serious financial planning and modeling … and think about how we maintain this system,” Stancil said, noting that it has been 10 years since the transit system went fare-free.

Council member Gene Pease asked whether the transit partners considered service cuts in lieu of a tax increase, and Stancil said that because CHT implemented wide service cuts last year, they chose not to propose cuts this year.

“I’m still getting complaints [about the service cuts],” council member Ed Harrison said. “For that matter, I’m still complaining about them.”

“It’s an expensive system to run for free,” he added.

Council members Lee Storrow and Matt Czajkowski said they wanted to look into adding back daytime hours at the Community Center pool, which were cut in last year’s budget.

Council member Jim Ward said he was concerned that a small tax increase this year and use of fund balance could mean a larger tax increase in next year’s budget.

“I, for one, am not for making a really rosy picture this year” to be followed by a big tax increase, he said.
The council will hold a budget work session on Monday and is scheduled to adopt the budget on June 11.

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