The Daily Tar Heel

Serving the students and the University community since 1893

Thursday February 9th

We break down the Town of Chapel Hill's 2018-2019 budget, tax rate increase

The Chapel Hill Town Council voted to pass the FY 2018-2019 budget on June 13. Here's what's new and how it'll affect you. 

How has the budget changed from last year?

The Town of Chapel Hill's new budget includes a 2-cent total increase in the property tax rate. This brings the tax rate to 52.8 cents per $100 of assessed value. 

At  $110.97 million, this year's budget is 3.67 million more than last year's, which was $107.3 million. 

The approved budget is $2.47 million greater than the proposed amount of $108.5 million. 

“You’ve got property values that have risen in town that have caused the budget to go up,” said Matthew Brinkley, budget manager of the business management department for the town.

Council member Michael Parker added that Chapel Hill is profiting from new developments like Carolina Square and Target on Franklin Street, allowing for a budget increase.

“As new properties are added to the tax rolls, that will generate incremental tax revenues,” Parker said.

Where will the tax increase go?

Of the 2-cent tax increase, 1 cent will go toward the general operating fund of the town, which allocates more than half of its expenditures to the Chapel Hill Police Department, the public libraries, and environment and development. According to Brinkley, this is being done in order to lessen the town’s reliance on fund balance — surplus money that is stashed for emergency situations. 

The second cent will go toward the Transit Fund in order to support existing services and avoid dipping into their rainy-day savings.

“We’re funding the transit tax increase based off of the need to get ahead of our bus replacement capital program," Brinkley said.

During Wednesday’s meeting Transit Director Brian Litchfield noted that a 1-cent increase is not likely to be sufficient for replacing the $1.4 million spent by Transit from fund balance in 2017-2018. Instead, the increase will be important for maintaining the steady operating and capital budgets.

What does this mean for me?

The tax rate has increased by 2 cents per $100 valuation, meaning that the owner of a $100,000 home would pay $528 in taxes for the 2018-2019 fiscal year. The same homeowner would've paid $508 in the 2017-2018 year.

The budget also includes a 3 percent salary increase for all town employees and no reductions to current services.

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