The Carrboro Board of Aldermen heard a presentation on fiscal trends last week as a prelude to meetings on the town budget scheduled for later this year.
The presentation was delivered by David Andrews, the town manager, who advised board members on the status and importance of local revenue streams.
“Property taxes and local sales taxes are our two most important players in the revenue budget,” he stated. “They make up 75 percent of total revenues.”
According to Andrews, those revenue streams attributed to a rising economic tide in Carrboro, with audited actuals showing an increase in the compound annual growth rate.
“Total revenues increased by an absolute value of $3.3 million — that’s 18.6 percent,” he explained. “That’s a compounded annual growth rate of 2.9 percent.”
Increases notwithstanding, Andrews reported that property tax revenue generated less income than expected over the past fiscal year, with gains of less than one percent.
“Property taxes made up $11.8 million — increased by $600,000 or 0.9 percent […] which is really not all that great,” he claimed.
If property tax revenue streams continue to stagnate, the town would become more reliant on sales taxes to generate municipal income – a condition that Andrews noted.
“The downside to that is that we’re becoming more reliant on consumption,” he explained. “In the event that we would ever have a recession or the like, we don’t have the stability of the property tax base — we’re reliant on sales.”
With new commercial properties like South Green and Shelton Station in development, board member Jacquelyn Gist asked Andrews whether raising taxes could be avoided.
“I would hate to see us raise taxes this year because we’re short and then not decrease them,” she cited. “I’ve never known anybody to decrease taxes because their revenues went up.”
The rest of the board will also grapple with the prospect of raising taxes in the months leading up to a review of the recommended budget, which is scheduled for May 9.
Despite the fact that local property tax rates have not kept pace with inflation, Andrews emphasized that Carrboro is a town that continues to live within its means.
“The rate of growth in expenses matched the rate of growth in revenues, so we have managed to live within the revenues that we’ve had.”
Photo by WCHL Staff.
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