The Chapel Hill Town Council is working to finalize how much taxes will increase in the budget for the upcoming fiscal year.

Chapel Hill Mayor Pam Hemminger said after a budget work session held last Wednesday there have been a number of things to happen over the last five years where there hasn’t been a tax increase incorporated into the budget. Hemminger added that there is no longer room to squeeze those things in.

“One of them was transit,” Hemminger said. “We talked quite a deal about transit and the fact that the federal government has gone from supporting 80 percent of buying our buses to no percent of buying our buses over a period of time.”

Hemminger said one penny of the proposed tax increase will be dedicated to the transit system – which is operated in partnership with UNC and Carrboro – for rising fuel costs, employee costs and to make up for the loss of state and federal funds.

Hemminger said other reasons for increases are supporting core services through the town’s general fund, covering post-employee benefits and other cutbacks in federal funds.

The town is considering an increase of either two or three cents.

“The manager proposed a three-cent tax increase, most of the council was more comfortable with the two,” Hemminger said. “We’re still deliberating; it’s still at workshop and then it will come to council.

“And the public is always welcome to give input; we look for those; we get emails; we get phone calls; we get people coming to speak to us. We are looking to vote on [June 13] on the budget.”

According to Hemminger, a one-penny increase on the tax rate equals about $800,000 for the town and is about a $30 increase on a $350,000 house.

Hemminger said her goal is to change the town’s tax base trajectory to more commercial and retail.

“You grow the other part of your tax base so that you don’t keep having to raise taxes,” Hemminger said. “Our sales tax numbers have been going up, but they started from a very small place.

“And while they’re going up, they’re not at a very big place yet. They will be with all the commercial component and retail that we brought in – the Blue Hill District, Wegman’s.”

Orange County is also looking at a tax increase.