Chapel Hill Proposed Budget Calls for Big Increase in Sales Tax

The $100.7 million proposed budget for the Town of Chapel Hill is calling for an 11 percent increase in sales tax revenue, but the North Carolina General Assembly may have something to say about that.

The Town Council got their first look at the proposal from Town Manager Roger Stancil on Monday night.

“The recommended [2015-2016] budget does not include a tax increase,” Stancil says. “There is revenue growth from other sources, such as sales tax and permit fees.”

Stancil says following several lean years after the recession, sales tax revenue has been riding an upward trend. But proposed legislation among state lawmakers regarding the redistribution of sales taxes may have a negative impact on Chapel Hill.

Cost of employee medical insurance is down 8.5 percent in the proposed budget. That seemed to make Mayor Mark Kleinschmidt very happy.

“8.5 percent decrease in health insurance cost?!” he asked. “I know I have to hear more about that because it’s almost unbelievable on its face.

“When has any American heard about that without some kind of change?”

Stancil says the lowering of cost does not include a reduction in benefits. He attributes the savings to wellness programs for town staff including increased number of those who have quit smoking.

Other items in the proposed budget include a four percent raise for town employees to be broken up with two percent in July and another two percent in January.

The Parking Fund also has a balanced projection for the first time in six years.

A $40 million bond that will not require a tax increase is also scheduled to be on the November ballot. That money would go toward funding capital improvement projects.

You can view the recommended budget here.

A public hearing will be held on May 18, before Budget Work Sessions are held June 1 and 3. The hopeful date to adopt a budget in June 8.

Chapel Hill Proposed Budget Projects Big Increase in Sales Tax Revenue

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