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County settles on budget, tax increases

Posted on June 28, 2007 by Staff

By Susan Dickson
Staff Writer

The Board of County Commissioners on Tuesday voted 4-1 to increase county property taxes by 4.7 cents and the Chapel Hill-Carrboro special district tax by 1.5 cents as part of the $173.6 million fiscal year 2007-08 budget.

The increases bring the county property tax to 95 cents per $100 valuation and the special district tax to 20.35 cents. For a $200,000 home, county property tax will increase $94, to $1,900.

Commissioner Mike Nelson voted against the budget. In budget work sessions, Nelson said he did not support raising the special district tax because it creates inequity between the county’s two school districts.

At a budget work session last week, the board identified about $835,000 in county budget cuts, including the deferral of hiring several positions and reducing the county’s 401(k) increase from $5 to $2.50 per pay period.

Commissioners used those reductions as well as larger tax increases to increase funding to the schools.

County Manager Laura Blackmon had recommended a budget that included a property tax increase of 3.7 cents and no increase on the special district tax. The commissioners had said they hoped to limit this year’s tax increase to equal debt-service payment increases. The county has increased the tax rate about six cents in each of the last two years.

Earlier this month, hundreds of county residents showed up at budget public hearings to support raising taxes to increase school funding. Both systems’ superintendents had warned that the schools would face major cuts if the appropriations were not increased.

The county manager’s recommended budget included a $535,000 increase in funding to Chapel Hill-Carrboro City Schools and a $464,000 increase in funding to Orange County Schools, with no increase on the county’s per-pupil allocation.

“We want to at least keep the school systems from going backwards,” Commissioner Barry Jacobs said. “We want to at least help them meet their mandates and open new schools.”

The commissioners increased the per-pupil allocation by $112, to $3,069.

Chapel Hill-Carrboro City Schools had requested a budget increase of $6.8 million. According to Superintendent Neil Pedersen, about $5 million of that increase would have funded state-mandated salary increases, the cost of opening new schools and enrollment growth throughout the district.

Orange County Schools had requested an increase of $3.7 million in funding. Superintendent Shirley Carraway said about $1.8 million of that increase would have funded state-mandated salary and benefit increases, as well as the cost of opening Gravelly Hill Middle School.

Overall, the commissioners approved $3 million in funding increases for Chapel Hill-Carrboro schools and $1.3 million in funding increases for Orange County Schools.

The special district tax increase will generate about $1.2 million of the funding for Chapel Hill-Carrboro schools. The commissioners said they wanted to use the tax to help the district with the cost of opening Carrboro High School in the fall and the new elementary school in the fall of 2008.

“I’ve always operated under the assumption that the district tax is primarily there to help with the cost of opening schools or other capital projects,” Jacobs said.

The Chapel Hill-Carrboro Board of Education will meet July 12 to allocate the budget appropriated by the board of commissioners.

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