Local Politics

Raleigh's growth straining its finances

Posted January 29, 2015

— The city's population has increased 10 percent in the last five years, which is starting to pinch Raleigh's budget, City Manager Ruffin Hall told members of the City Council on Thursday.

The council held its annual retreat to plan for the year ahead, and Hall said Raleigh faces a $4 million to $6 million deficit for its 2015-16 budget. He noted, however, that the city has a few months to look for places to close the gap, and he promised to present a balanced budget to council members in the spring.

Much of the shortfall can be blamed on the loss of privilege license revenue. Cities charges businesses privilege taxes to be able to operate within their jurisdictions, but state lawmakers eliminated privilege licenses as part of a tax reform package passed last year. The tax expires on June 30.

Raleigh generates more than $7 million from privilege licenses, or about 1 percent of its annual budget.

Gov. Pat McCrory and legislative leaders have promised to work this spring on ways for cities to make up for the lost revenue, but until that happens, Hall must budget based on not having any of that revenue.

Hall also noted the difficulty in budgeting for Raleigh's growth.

"We have more households (where) we have to pick up garbage. There are more streets we have to maintain. There are more leaves we have to collect. There are a lot of demands for additional services on the city," he said. "It's a good problem to have, and we're lucky to be in that particular position. But hopefully that growth will generate additional revenue that we can use to pay for that. That's what we're currently trying to balance against the loss of other potential revenues."

The city won't have to cut services, he said, but it might lack the money needed to pay for new positions such as additional police officers or firefighters.


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  • jrbrock Feb 2, 2015

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    No, no. Your weird stratification of people based on urban/suburban makes no sense when it comes to paying their fair share. Well off people in the city and well off people in the suburbs both pay more than their fair share. Poor people in both areas pay less than their fair share.

    Take a look at Raleigh's budget which is published on the web. Public utility revenue is a huge money maker. Almost half of the revenue is transferred to the General Fund to pay for other random stuff.

    Public safety is the big ticket item that doesn't directly raise revenue. It's funded through property taxes and profit from selling water. Guess what has more crime... urban or suburban? According to the FBI, in major metro areas, the urban core's crime rate is over 3x higher than the suburban area.

  • Dana McCall Jan 30, 2015
    user avatar

    This is opposite the way it is supposed to work. Growth is supposed to bring in more money than it costs to have them. Perhaps the city is dumping money into projects that aren't affecting newcomers...

  • aaron14 Jan 30, 2015

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    It's YOU that isn't paying for your lifestyle.

    One high rise produces as much tax revenue as most entire neighborhoods in North Raleigh.

    I'm not sure what you think is hipster about paying $350,000 for a condo, but downtown is the only reason your taxes have stayed this low - because you're certainly not paying your fair share.

  • Paul Hill Jan 30, 2015
    user avatar

    Does that mean that the additional people, aren't paying their fair share?

  • Hans Rising Jan 30, 2015

    McCrory and the GOP have been a disaster at every turn.

  • Tom Smith Jan 30, 2015
    user avatar

    here's an idea ruffin. you know those three additional assistant city manager positions you created out of thin air when you got hired? start with those. in salary and benefits, that ought to save a million/yr right there. no other city manager ever had to hire three assistants to do the job. but good plan. cut fire and police. always fire and police. never admin and bureaucrat.

  • xylem01 Jan 30, 2015

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    I agree. Raleigh should end the leaf pick-up program. Get those liberals out in their yards dealing with their own leaves instead of picking them up for them. What a waste of revenue.

  • B.c. Jimmy Jan 30, 2015
    user avatar

    View quoted thread

    google Raleigh Second Mortgage and Raleigh Small Business Incubator.

  • teleman60 Jan 30, 2015

    Time for LOTS MORE TAX CUTS!!!

    Tax cuts will fix EVERYTHING!

    Or maybe another gay ban, or no, another abortion law, that's right, that's the ticket.

    More culture wars fix everything, potholes, sidewalks, paving streets.

    Or maybe get some of those millions of dollars of forfeited cash and houses that the sheriff is sitting on, that's the ticket spend that money before the innocent have a chance to get it back!

    It will all be fixed if we just pray harder...

  • Brandon White Jan 30, 2015
    user avatar

    The hotel/motel and prepared foods tax goes to the country - not the city. It is used for items that draw people to the Triangle - like the convention center in the picture, PNC Arena, Mudcats 5 County Stadium, and parks across the county.

    The real reason that Raleigh is in a spot is the Privilege License - nothing to do with growth. City would benefit from growth - more property tax, trash covered by trash fees, etc.