The Carrboro town staff presented its proposed budget for the upcoming fiscal year to the town council on Tuesday night, walking through the challenges of this budgeting cycle while aiming to limit the financial burden on residents.
After working with the elected officials during an April budget workshop, Town Manager Patrice Toney and other staff members shared their plans for a $44.6 million budget for Fiscal Year 2026-27, with $36.2 million in general fund expenditures. Toney described it as a document that “reflects our commitment to affordability while navigating challenging economic conditions,” which includes keeping the tax rate at the 56.53 cents per $100 of assessed value.
The total budget is down 29% from the FY26 budget approved by the town council — which carried a tax rate of 9.72 cent above revenue-neutral marks and concerns with over-using the general fund balance to cover shortages in expenditures and revenue. Toney said the town ultimately did not have to dip into the fund balance thanks to unexpected income from insurance payments, and roughly $15 million of spending came off the capital projects fund from spending for a future Town Hall renovation. This year, she told council members, that money is off the books as town staff step back from the project to address other pressing needs.
“There’s a number of things: the [tropical] storm and and losing Public Works’ [building], and trying to find a location to keep them together and stable,” Toney said as the key factors. “Once we feel good about that, we will put out a issue and a separate RFP — because we also want to look at our town properties to make sure we’re utilizing them in the best manner… So, we wanted to take a pause just to explore other options and making sure this is the best location, even, to do renovations for a new town hall.”
While Tropical Storm Chantal brought significant damage to the town’s Public Works facility and vehicle fleet, alongside several residents’ homes, the initial insurance coverage helped pay for short-term fixes and cover some of the town’s expected spending. More reimbursement will come from the Federal Emergency Management Agency (FEMA) after the Town of Carrboro makes more purchases, including covering some vehicle replacement. But in the meantime, town staff are asking $2.27 million to be allocated for replacing 20 different vehicles, redesigning its Public Works facility, and covering related operational costs affected by last July’s storm.
The Town of Carrboro is looking to relocate or significantly renovate its Public Works building after the workshop and department headquarters suffered several feet of water damage during last July’s Tropical Storm Chantal. Many vehicles and equipment. (Photo by Brighton McConnell/Chapel Hill Media Group.)
The budget proposal focuses on making the town’s spending leaner with as few cuts as possible, with the staff freezing non-essential vacancies and not hiring any new positions. But there are some areas with targeted decreases, including within Human Services. After seeing nearly $474,000 allocated in FY26, the Fy27 budget recommends around $260,000 (45% decrease) even as their partners — Inter-Faith Council and the Orange County Partnership to End Homelessness — are making $118,000- and $144,000-requests, respectively.
Carrboro Housing and Community Services Director Anne-Marie Vanaman said her department is working through a few scenarios with this updated level of funding, saying they are looking at both duplication of services and overall performance as ways to decide what projects will be prioritized in a scaled-back budget. She described the “steep cut” as difficult to take, but a reflection of how Carrboro will need to reassess its nonprofit priorities and partnerships amid a tough spending environment.
“It’s not easy,” Vanaman told the town council, “but our goal is to present a few different scenarios to the Housing and Human Services Commission next week and have them work from that and see how they are reacting to those. What we don’t want to do is a percentage across the board cut for all of those agencies. That makes no sense. We are just going to have to prioritize.”
Beyond federal funding cuts and challenges around affordability, Carrboro is also having to navigate having less property tax revenue than anticipated due to a North Carolina tax loophole. A court ruling from 2012 combined with a 1975 state law around exempting nonprofit housing owners from paying local property taxes has led to more corporate landlords dodging those payments. As long as the landlords offer a nonprofit any percentage of ownership of a property site — even as low as 0.01% — they can file for a tax exemption, and the amount of filings in the last five years has skyrocketed. Carrboro is the Orange County town most affected by the “Blue Ridge loophole,” according to the News & Observer, with Toney’s staff presenting on Tuesday that it saw $82 million worth of assessed property value removed from its tax base.
“By my math,” Council Member Catherine Fray said, “that’s [roughly a] $460,000 impact to our general fund. We are losing $460,000 because $82 million in tax base has been removed, at least for now, via this loophole.”
While the council members largely kept their big-picture comments reigned in for the upcoming budget discussions, Council Member Danny Nowell took time Tuesday night to share his appreciation for the town staff and his overall support for the budget’s direction. He said between the climate innovation and important benchmarks being hit for the town’s capital projects, he said he believed he hadn’t seen “this level of budgetary performance at any other time I’ve been on this council.”
“I loathe being in an austerity posture with Carrboro’s values,” Nowell said. “And I think the amount of progress we are making toward our goals in that posture is remarkable, to be honest, for this to be the budget document that it is. You know, we right sized our tax rate last year in a move that I think was pretty painful for us and more painful for our residents.
“I’m really proud of the work in this document under the conditions,” he concluded. “I’m pretty grim about the conditions under which this document has been written, but I think it’s a real achievement and I really am grateful for it.”
The full Fiscal Year 2026-27 proposed budget and Tuesday’s presentation can be found on the Town of Carrboro’s website. The town council is set to meet again on Tuesday, May 19 and aims to adopt its budget before its final meeting of June 16 before a summer break.
Featured photo via the Town of Carrboro livestream.
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