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County manager proposes no tax hike for now

Posted on May 19, 2011May 19, 2011 by Staff

By Joshua Lucas
Staff Writer

CHAPEL HILL – Property taxes won’t have to go up this year, but inevitable increases are looming next year, County Manager Frank Clifton told the Orange County Board of Commissioners Tuesday night.

On the horizon are continuing human-services costs, already approved capital projects and long-delayed economic-development and capital costs, he said.

For the third consecutive year, Clifton presented a budget that includes no increases in property taxes and which holds spending essentially flat. The $177 million budget got its first public airing at the Orange County Board of Commissioners meeting Tuesday night.

The proposed budget keeps the county’s base property-tax rate at 85.8 cents per $100 of assessed value on real estate and recommends maintaining the additional 18.84 cent rate for property within the Chapel Hill-Carrboro City Schools district.

In pointing past this year’s budget to the coming crunch, Clifton was blunt.

“We will be facing tax increases in the coming year,” he said, largely because of water and sewer projects the county has already committed to building, but also because of other choices commissioners are facing.

“That’s on the near horizon.”

The budget maintains current spending levels, with nearly half the budget going to the county’s two school districts or to service debt on school capital costs. No layoffs are called for again this year, and provision is made for some small increases in employee health care costs.

The county provides ample human-services programs, Clifton said, that exceed both state and federal standards. Those costs are taking their toll on the budget.

“We’re at the point that we can’t continue to do that without additional revenues,” Clifton said.

The budget also represented a county ever more reliant on money from residential property taxes to pay its bills. More than three-quarters of the county’s revenue comes from property taxes, a higher percentage than either Durham (58 percent) or Wake (66 percent) counties.

That balance of revenues reflects the county’s overwhelmingly non-commercial tax base, and Clifton hinted that future economic-development efforts could create additional pressure for a tax increase.

Furthermore, the county has delayed taking on any large-scale capital projects such as the construction or renovation of facilities. Eventually, those things have to happen, Clifton said.

“We’re probably building up demand for the future,” he said.

The commissioners will examine and discuss the budget at work sessions and public meeting in coming weeks, with a budget public hearing set for Tuesday at 7 p.m. at the Southern Human Services Center on Homestead Road in Chapel Hill. The county hopes to have the budget up for a final vote by the board at its June 21 meeting.

In other county business, the board honored the South Orange Rescue Squad with a resolution designating June 4 as a day in the squad’s honor and approved a resolution commending departing county health director Rosemary Summers for her years of service.

Summers accepted the honor to a standing ovation, and commissioners also praised her directly.

“We really have been privileged to have you,” board Chair Bernadette Pelissier told Summers.

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