By Kirk Ross
Staff Writer
No furloughs and no layoffs are in the works for next year, but Chapel Hill employees can expect to see no pay increases either, under a new $49,759,000 budget proposed by Town Manager Roger Stancil.
The Chapel Hill Town Council got its first look at the budget, which spends about 0.3 percent more than last year, at a briefing Wednesday night.
The budget includes an adjustment to the town’s property tax rate based on the recent countywide property revaluation, from 59.1 cents per $100 valuation to 49.7 cents. Stancil said the figure is “property tax revenue neutral†in that the town will be taking in the same amount in property taxes this year as last. The number reflects a conservative growth rate of 1.8 percent, a 24 percent average increase in property values and a 10 percent drop in the value of vehicles and personal property.
The adjustment means most homeowners will likely see a rise in their taxes to make up for the drop in revenue from vehicle and personal-property taxes.
Town budget director Ken Pennoyer said vehicle tax revenues are dropping because people hold off buying new vehicles during downturns in the economy.
The town is also expecting a significant drop of almost $1 million in sales tax revenues, also driven by the recession.
To make up for the sales tax revenue drop, an increase of 17 percent in the town’s employee health care plan and $400,000 in required funding for the town’s health care plan for retirees, Stancil proposes to use $2 million of the roughly $2.4 million in savings the town built up thanks to a program to cut 5 percent of the current-year budget that began last year. That effort helped put the town on a better footing for this year, Stancil said.
“We saw in October and November that something was happening and did things a little earlier than other places,†he said. “If we’d have kept buzzing along at the same level, we’d have been in bad shape.â€
Other major items in the budget include:
• delay in issuing new debt, primarily for the proposed library expansion;
• altering the way the town pays workers’ compensation;
• improving the town’s in-house health and safety programs; and
• changing the retirement health care benefit to a defined contribution plan.
In addition, Stancil said the town will continue the savings program begun last year, including holding vacant positions open and reduce training, supplies and equipment costs.