CHTC Approves Budget With Two-Cent Tax Hike

CHAPEL HILL- The Chapel Hill Town Council signed off on next year’s budget on Monday night, voting to raise the property tax rate for the first time in four years.

The approved $94 million dollar spending plan balances the budget by raising the property tax rate by two cents, to 51.4 cents per $100 of value.

Though the vote was unanimous, it didn’t pass without criticism.

“We will drive a few of those neediest among us out of Chapel Hill when we pass this budget. That’s just for sure,” said council member Matt Czajkowski. “Every time we raise taxes, for whatever good purpose, we make it harder and harder for people of modest means, or even above modest means, to live here.”

Nonetheless, Czajkowski praised the town manager for bringing forward a well-balanced budget.

Half of the property tax rate increase will go to fund the transit system. The other half will go to the town’s General Fund, to be used to pay for increased library hours and the cost of hauling trash to a transfer station in Durham.

This is the first time since 2008 that the council has voted to raise the property tax rate, and, as council member Ed Harrison pointed out, the first time in nine years that the transit fund rate has increased.

“The system costs 60 percent more to fund that it did nine years ago, with 40 percent more riders,” said Harrison.

The $54 million dollar General Fund budget includes an additional $244,000 in library funding to keep the library open 64 hours a week. The newly expanded facility had been cut down to 54 hours when it reopened this spring due to the building’s higher operating expenses.

The budget also includes a two percent pay raise for town employees and covers a four percent increase in health care costs.

Looking ahead to next year, Town Manager Roger Stancil says the council will need to consider long-term solutions for the town’s solid waste disposal, as well as the financial stability of the transit system. He advised that it might be time to start planning a bond referendum to take to voters.

“You also have some pretty significant improvements in parks and recreation and greenways facilities that are worn out and need to be replaced,” said Stancil. “So we need to start talking about what are the ways we would replace those facilities and how would we plan for a future bond referendum.”

Though the council set the town’s tax rate last night, next year’s county’s tax rate is still up in the air. Commissioners have indicated they don’t plan to increase the countywide property tax, but they may opt to raise the Chapel Hill-Carrboro City Schools district tax as well as the Chapel Hill Fire District tax.

The county will adopt its budget on June 18.

BoCC Eyes CHCCS District Tax, Not Property Tax, For School Funding

CHAPEL HILL- Orange County Commissioners signaled on Thursday that they’re looking for more money to fund public schools, but they stopped short of supporting a countywide property tax rate increase.

“As much as I believe in a strong school system, raising the taxes, personally I believe we have to really have to take a deep look at that, because the rate of poverty is increasing so dramatically in Orange County,” said Renee Price.

In the past two weeks, dozens of residents have  come out to public hearings to ask commissioners to allocate more money for the school systems.

But some commissioners worried that those who can’t afford a tax increase have not had a voice in the debate. Penny Rich said she’s been hearing from residents who did not feel comfortable speaking out on the issue.

“They are very passionate about schools but they just can’t afford any more taxes,” said Rich. “We can make the schools better by raising taxes, but they won’t be part of it, they would have to move.”

Commissioners did indicate they might be willing to increase the Chapel Hill-Carrboro special district tax to help raise the $2 million needed to open the new Northside Elementary.

“We do have a precedent for opening schools in Chapel Hill-Carrboro City Schools on the district tax, so I think as we’re balancing all these different needs, we shouldn’t discount that as a possibility,” said Alice Gordon.

A two-cent increase of the district tax would generate $2 million dollars, while a five-and-a-half cent increase would be needed to fully fund the school board’s budget request.

The manager’s recommended budget falls between $3 million to $8 million dollars short of what the Orange County and Chapel Hill-Carrboro school boards had asked for, but Board Chair Barry Jacobs noted that the manager’s budget actually increases school spending by about $2.4 million over last year, and he said this year’s funding debate is par for the course.

“I don’t think anybody should take umbrage if we don’t fully fund what the schools request, because they know that no matter what they ask for we can never fully fund it,” said Jacobs.

Officials from both school systems are concerned about state budget proposals that would eliminate funding for teaching assistants in second and third grades.

If approved, the Orange County and Chapel Hill-Carrboro districts stand to lose a combined total of 70 teaching assistants. School board representatives estimated it would cost approximately $2.3 million dollars in local money to save those positions.

While the board agreed to keep looking for more school funding, Bernadette Pelissier warned that the county’s resources are limited.

“On the one hand, I say we have to do as much as possible for the schools. On the other hand, we can’t always fill in all the gaps that we have from the federal and state level,” said Pelissier.

Commissioners will continue their deliberations at a series of work sessions next week, with an eye toward formally adopting the budget on June 18.

CHTC Weighs Library and Transit Budget Options

CHAPEL HILL- The Chapel Hill Town Council is considering a two-cent property tax rate increase to balance next year’s budget. Half of that would go to fund transit, which makes up about 20 percent of the town’s expenditures.

Many on the council seem to support the plan, but at a budget work session on Monday, Matt Czajkowski pushed back against the idea that fare-free transit should be prepaid by property owners.

“Let’s just be real about what the alternatives are here. Can’t go fare-free? There are fare-collecting systems all over the world. Try Europe, “said Czajkowski. “But oh no, we could never do it because it would cost a million dollars and they don’t take quarters any more. There are different ways to do this but we don’t want to talk about about them.”

Ed Harrison said if the system reverts to charging fares, UNC would likely pull its funding, which makes up almost 60 percent of the transit budget.

“The reason we went fare-free is that the student body at UNC voted for that and the university went along with it,” said Harrison. “The statement from the [transit] partners is that if we stopped fare-free, UNC would pull its funding.”

Chapel Hill Transit expects to lose nearly $900,000 in state funding next year, due in part to service reductions made over the past two years to balance the budget.

Interim Director Brian Litchfield said the transit system, which is jointly funded by Chapel Hill, Carrboro and UNC, will see some new revenue from a vehicle registration fee that the county levied along with the half-cent transit tax, but he said the majority of the tax proceeds are earmarked for light rail, not bus service.

Chapel Hill Transit is in the process of hiring a consultant to evaluate the system’s long-term financial stability, but the council will need to sign off on next year’s budget long before that study is complete.

Gene Pease said he’s frustrated by the situation.

“We wait too damn long to start this planning. It’s been how many years? Twelve years before a long-term financial plan has been put into place?” asked Pease. “Now we would like to have those alternatives to talk about, but we’re at least a year away from that.”

There was one bright spot in Monday’s budget debate, as Town Manager Roger Stancil told the council that the county’s level of funding for the Chapel Hill Public Library would be increasing to an all-time high of $483,000, enough to slightly increase the library’s operating hours.

Currently the library is open 54 hours a week, down from 68 before the expansion. The council has heard from many residents angry with the service gaps, a sentiment echoed by Mayor Mark Kleinschmidt.

“Four or five hours on a Saturday is nowhere near anything called best practice anywhere,” said Kleinschmidt. “I’m actually embarrassed that those were the hours that we chose to close, on the day that most people don’t work.”

The recommended budget would fund 58 hours of operation, and once Orange County’s contribution is factored in, that number could rise to 60.5.

But Sally Greene pushed fellow council members to come up with the additional money needed to restore the library to its full 68 hour a week schedule.

“My opinion is that we need to close that gap. It is $181,000. We need to find a way to close the gap to give the new director the hours she needs, the hours the community needs, and not undercut her ability to succeed,” said Greene. “We’re talking about setting the hours for the whole next year, not coming back in three months or six months. We’re setting the library’s hours for the year.”

Lee Storrow wasn’t so sure.

“Its hard to feel confident that moving to 68 is the right thing to do, without feeling like that we’re really considering all the options, not just from where we are, jumping right to 68,” said Storrow.

No decisions were made as the council asked staff to return with more detailed scenarios to consider at a work session on Wednesday.
The council is scheduled to formally adopt the 2013-2014 budget next week.

CH May Hike Prop Taxes This Year; OC And Carrboro May Not

Officials in Chapel Hill, Carrboro, and Orange County are gearing up for another round of difficult budget talks—and although the economy may be on the rebound, County Manager Frank Clifton says local governments still have no more money to work with than they did five years ago.

“We’re at 2008 levels–and actually the county’s budget in 2008 (was) greater than it is today,” Clifton says. “That’s the reality: the tax base for the county is not much different today than it was in 2008.”

Still, Orange County officials say they’re hopeful they can get through another two-year budget cycle without raising property taxes.

“You have to balance (priorities) out,” says Orange County Commissioner Alice Gordon, “but I think going into the budget process, we’re going to try not to raise the general property tax rate.”

And while town governments too are anticipating some difficult budget decisions, officials in Carrboro say they’re also confident they can avoid raising taxes on residents this year.

“Just kind of speaking in generalities, our goal this year is to present a no-tax-increase budget,” says Carrboro Assistant Town Manager Matt Efird. “And the preliminary budget thus far does not include a tax increase.”

But it’s a different story in Chapel Hill, where officials are dealing with a variety of unique budget challenges—and as a result, Town Manager Roger Stancil says a tax increase may be unavoidable this year.

“I apparently used up all the rabbits in my hat sooner than Frank and Matt did,” he says. “But there is a brand new library open, and we have been saying for several years that operating that library at the same level that the community’s used to–that was equivalent to a penny on the tax rate. The community decided to close the landfill and we take our garbage somewhere else–we said from the very beginning, that was (another) penny on the tax rate (in) increased cost, for the Town of Chapel Hill to do that.”

Compounding that, Stancil says, is the possibility of an additional penny tax increase from Chapel Hill Transit as well.

While different local governments are expecting to make different decisions on the question of raising taxes, officials across the board agree that the coming budget talks are going to be difficult. Especially now that municipal governments have already streamlined their operations in previous budget cycles, Chapel Hill Town Council member Laurin Easthom says there’s no such thing as an easy cut.

“The services that we have in Chapel Hill exist because somebody wanted them,” she says. “And they’re useful services. So it makes it really tough on us to decide to chip away or cut–because we know it will affect a certain group, or everyone.”

And Carrboro Alderman Lydia Lavelle says she’s particularly concerned for municipal employees, who’ve gone without pay raises for years.

“We’ve done a good job of stipends or other things the last couple years,” she says, “but as far as cost-of-living (increases)…we’ve been struggling a little bit with the implementation of a living wage.”

Municipal governments will begin their budget discussions later this spring.

Clifton, Easthom, Efird, Gordon, Lavelle, and Stancil made those comments on Thursday during WCHL’s annual Community Forum.

Click here to revisit the entire ten-hour forum.