Chapel Hill approves budget, penny tax increase

tgrubb@newsobserver.comJune 9, 2014 

— The Town Council approved a $96 million budget Monday that adds a penny to the tax rate for future projects and sets aside more money for affordable housing.

The town of Chapel Hill’s new property tax rate will be 52.4 cents for every $100 in assessed property value. The owner of a house valued at $300,000 will pay $1,542 in town taxes.

Chapel Hill residents also pay county taxes and a special city schools district tax, both of which the Orange County Board of Commissioners could set within the next week. The county’s current tax rate is 85.8 cents per $100 in assessed property tax value, and the schools tax rate is 20.84 cents.

Town Manager Roger Stancil said next year’s budget also adds 75 cents to the town stormwater fee, making it $24.75 a year for every 1,000 square feet of impervious surface, such as driveways and roofs.

The budget also uses $2.6 million in savings to meet a budget shortfall, he said.

Affordable housing has long been a critical need for the town, local leaders and housing advocates said. Many town residents pay more than 30 percent of their income – the amount that financial experts consider sustainable – toward housing. More than half of town residents rent housing.

The town’s approved budget allocates nearly a penny on the tax rate, or $689,000, for affordable housing projects by combining existing housing funds with money from a delayed solid waste pilot project and future Ephesus-Fordham redevelopment fees.

Susan Levy, executive director of Habitat for Humanity, called the decision “a bold and great thing to do” and told the council that housing advocates are “really heartened by your commitment.”

Other budget highlights include money for street resurfacing, to hire a teen-engagement specialist and to give town employees a 3 percent market-rate pay increase.

Stancil said the penny increase in the town’s property tax rate could restore the debt fund to pre-recession levels.

The town is on track to have an additional $20 million in financing available for future needs by 2017, said Ken Pennoyer, the town’s business management director. The extra penny going into the debt fund would allow the town to borrow another $10 million toward $159 million in identified needs, he said.

The town’s four most-pressing projects – a new police department, a solid waste transfer station, five new fire stations and a new parks and recreation office – are being planned at a total cost of $46 million.

The town doesn’t have land for a police station yet, but it has found sites for at least two fire stations.

Other projects include stormwater improvements and maintenance, local greenways, sidewalks and bike plans. The town also has a number of street repaving projects that have been delayed in previous years to save money.

Grubb: 919-932-8746

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