Chapel Hill likely to increase tax rate

The newly proposed budget would see a property tax rate increase of two cents


The Chapel Hill Town Council met May 15 to continue discussions of next year’s budget, naming four main priorities: Recruiting and retaining employees, providing high-quality services to residents, being good stewards of facilities, fleets and infrastructure and encouraging more affordable housing.

“This budget continues funding the priorities in the five-year budget strategy and supports the complete community framework,” said Town Manager Chris Blue. “It addresses the increased costs to carry out the services provided by transit, and it bridges the gap to next year’s revaluation, where we propose to use the expected tax growth to right-size our budget.”

The proposed budget is just over $156 million, a 4% increase from last year, with a tax increase of $0.02 to help fund it. The new property tax rate would be $0.592.

According to Blue, the two-cent increase would result in nearly $2 million of extra revenue to be utilized for operations, facilities, streets, fleets and transit operations.

“We recognize that a tax increase has a more significant impact on our community members with lower household incomes, which is why we’ve committed $100,000 for tax assistance with this year’s budget, as we’ve done this past year,” Blue said.

The council inquired about the potential impact of a tax increase on local businesses.

“The bottom line is the impact on businesses is inconsistent,” said The Chamber for a Greater Chapel-Hill Carrboro CEO Aaron Nelson. “First it depends on the type of enterprise: retail or office or even the property owner. It depends on whether you’re existing, you’re already there, in which case you’re seeing small increases, and those are mostly incremental, or it’s new, and it’s a barrier to your entry. Then the uneven impacts of revaluation which is also inconsistent across our community.”

The council will hold a final vote on the budget, as well as an installment debt agreement, on June 5.

A $44 million bond referendum for the November election was also approved, including $15 million targeted toward affordable housing, $15 million for public facilities, $7.5 million for streets and sidewalks and $6.5 million for parks and recreation.

“This bond issuance will allow Chapel Hill to move forward on important projects without raising taxes,” said Mayor Jessica Anderson. “We like that. Also, voter approval allows us to borrow money for those projects at a lower rate, which is also really important.”