CHAPEL HILL - Property owners could pay a slightly higher county tax rate next year under a preliminary budget presented at Friday’s Orange County commissioners retreat.

County Finance Director Clarence Grier said a 1.11-cent tax-rate increase may be necessary. Grier proposed a $188.7 million budget for 2013-14. The current county budget is $180 million

An increase would make the county tax rate 86.9 cents per $100 in property value, Grier said. The county property tax bill for a $150,000 home would be $1,303.50.

Property taxes provide most of the county’s annual revenues. One cent on the property tax rate generates roughly $1.5 million, Grier said.

The county also relies on sales taxes but has had to adjust its expectations for next year because the economy is in flux, he said. The budget also uses 22.2 percent of the county fund balance, about $5.2 million, to meet next year’s needs, he said.

The county faces rising costs for energy usage and retirees and their health insurance, he said. The county also should study employee salaries to be sure they are being paid fair market value, he said.

School funding will be a major issue, too.

The state has slowly cut school funding for decades and could speed up the process under the new administration, Commissioners Chairman Barry Jacobs said. The legislature could ask local schools to do more for charter schools, including paying to build schools, Commissioner Mark Dorosin said.