Carrboro Recommends No New Tax

The Carrboro Board of Aldermen got its first look at Town Manager Steve Stewart’s $19.1 million fiscal 2010 recommended operating budget on Tuesday, which includes a revenue-neutral property tax rate of 58.94 cents per $100 of property valuation.

While the tax rate provides no increase in revenue for the town, taxpayers could see an increase in their tax bills, depending on how the recent revaluation affected their property values.

The budget includes $19,075,434 in recommended general fund expenditures and revenues, with property and sales tax accounting for 73 percent of revenues. The budget year begins July 1.

Town officials expect sales tax revenues to decrease by more than 9 percent in the coming fiscal year in addition to a significant reduction in grant funds from the state, equaling about 2 cents on the property tax rate.

“I’m hopeful that we will do better than this, but every month for the past number of months we’ve seen a decline overall, so we want to be very conservative and very safe,” Stewart said. However, he added, “Locally, we’re doing better than much of the state.”

The recommended 58.94 cent tax rate was adjusted down from the fiscal 2009 rate of 68.63 cents to account for the recent property revaluation. This year’s revaluation produced a tax base of nearly $1.9 billion, compared with about $1.6 billion in fiscal 2009.

Stewart said that while the tax base is larger than that of last year, the adjusted tax rate would level out town revenues from property taxes.

“We don’t get any more money out of the revaluation,” he said. The town’s key interests in creating a budget, Stewart said, were to avoid a tax-rate increase while maintaining current service levels and active employees’ jobs and benefits and continuing with long-term planned capital initiatives.

“The economic crisis is felt by everybody in this community, and putting this budget together we tried to be very sensitive to that,” Stewart said.
The budget represents an increase of $595,059 over fiscal year 2009. The increase includes non-recurring revenue and expenditure increases in installment proceeds to purchase vehicles and equipment, a transfer from the capital reserve fund to finance street resurfacing and income generated from recurring revenues.
To keep the tax rate down, Stewart recommended that only the Human Services Grant Funding program be expanded, with an increase of about $10,000.
Stewart also recommended the temporary suspension of the town’s pay-for-performance plan.
“No town employee would receive any salary increase,” Stewart said. He added the town wouldn’t see an increase in health insurance rates because town staff put out a request for proposals on health insurance plans.
Stewart also recommended the town continue a soft freeze on vacant positions.
According to Stewart, the town could potentially fill vacant police officer positions with grants from within the federal economic stimulus plan. Other opportunities from the stimulus plan include possible funding for sidewalk projects, bus shelters, bike lanes, fire substation funding and more.
Board members said they were pleased with the budget and commended Stewart for preparing a budget that included a revenue-neutral tax rate while maintaining services.
Board member Dan Coleman said Carrboro’s budget should serve as a model for other municipalities.
“It’s pretty remarkable to be able to maintain the status quo,” board member Lydia Lavelle said.
The town will hold a public hearing on the manager’s recommended budget on May 26 at 7:30 p.m. at Carrboro Town Hall.