Town to Strive to Keep Down Taxes in 2003-04

The Chapel Hill Town Council, preparing to begin deliberations on the town's 2003-04 budget, hopes to avoid raising taxes for a second year in a row.

Town Manager Cal Horton's budget estimates, which were presented to the council at a planning session Friday, include a 1.96-cent increase to the tax rate of 51 cents per $100 valuation.

But after last year, when the town raised the tax rate by 4.9 cents per $100 valuation, council members said they believe another tax increase is undesirable.

Horton's budget estimates are only preliminary guidelines.

Council member Pat Evans said the council wants Horton and town staff to keep the goal of not increasing taxes in mind while finalizing their budget proposal in the next few months.

The town's substantial tax hike implemented last year was a result of Gov. Mike Easley's decision to withhold funds for local governments, said council member Jim Ward.

"Funding we typically receive through the state that is designated for counties and municipalities was withheld," Ward said. "Every town in North Carolina was caught up in the same bind."

Although the state is projected to have a $2 billion budget deficit in the 2003-04 fiscal year, the N.C. General Assembly passed legislation protecting the local revenue that was withheld last year.

The legislation also gives local governments the option of instituting a half-cent sales tax hike.

Still, Ward said, the town must be wary of allocating money that is expected to come from the state.

Ward said the council also must consider the financial status of Chapel Hill residents, many of whom are still feeling the effects of a lackluster economy, rising gas prices and an unreliable stock market.

"We need to do everything we can to keep from adding another burden," he said.

Ward and Evans said the council, while forming a budget over the next few months, even could look into lowering the tax rate.

Evans said that after last year's increase, a tax cut might be warranted. "I think the public might be expecting a decrease," she said.

The council will host public forums and consult the heads of town departments, advisory boards and committees while constructing the budget.

The council will ask the town departments and committees what their financial needs are and whether they need additional staff or new programs for the next fiscal year, Evans said.

"We get a lot of input before we really start working on it."

Evans said that as the council examines this year's budget priorities, which also were discussed at Friday's planning retreat, it is important to keep the implications of the budget in mind.

Generally, the manager releases a budget proposal in late April and the council sets a tax rate by July 1, the beginning of the fiscal year.

The council's first public hearing on the budget will be held Jan. 29 at the Chapel Hill Town Hall.

The City Editor can be reached at citydesk@unc.edu.