Chapel Hill Approves Budget with 2-Cent Tax Increase

The Chapel Hill Town Council voted unanimously last week to adopt the budget for the next fiscal year, which begins on July 1.

The budget includes a tax rate increase of 2 cents, down from the initially proposed 3 cents, for a combined property tax rate of 52.8 cents per $100 of assessed value.

According to town manager Roger Stancil, the budget will continue to cover the town’s high level of services such as fare-free transit, competitive pay and benefits for town employees and funding for town infrastructure.

“The FY19 budget includes a two penny total increase in the property tax rate,” Stancil said during his presentation to the council. “The penny for transit supports existing service levels and fills the gap in less replacement funding.”

Local governments have been picking up more or all of the tab on some transit replacement in recent years due to changes in federal and state funding, according to Stancil.

“We spent down our fund balance to purchase the buses we needed to replace the fleet,” the manager said, “and now we need to replenish that fund balance and continue a program jointly with our partners of Carrboro and UNC – Chapel Hill to replace those buses.

“This budget also includes one penny for the general fund, it supports existing service levels and rebuilds the fund balance.”

Stancil said the new budget reduces operating costs by about $464,000, maintains retiree healthcare prefunding at the current level and restores economic development sponsorship.

Other things included in the budget are a pilot program for transportation and child care assistance for advisory board members and an urban design development review initiative.

Mayor Pam Hemminger said at the meeting that nobody likes to raise taxes on citizens and that is not the goal of the town.

“We’ve tried really hard to take the longer view,” Hemminger said. “And what the longer view is, is changing and diversifying our tax base. We can’t keep depending on residential property taxes and business property taxes to keep us going.”

Hemminger said it was important for the town to work toward increasing sales tax to ease the burden on property owners.

“So I wanted to get the money back in economic development because we are getting that traction and seeing things, like our Target, like the Wegman’s coming, like some of these businesses that are staying here, growing here, providing jobs, plugging back into our economy,” the mayor said. “And that will help us not have to keep raising taxes to give our citizens the level of service we know we want, the things we value.

“It will give us dollars to do more things for affordable housing and all those kinds of things.”

Chapel Hill saw 3 cents increase in property taxes combined over the 2014 and 2015 fiscal years. There have been no tax increases included in the last three budgets.