Local News

Raleigh, Durham eye tax increases

Posted May 20, 2008 1:11 p.m. EDT
Updated May 20, 2008 9:48 p.m. EDT

— Raleigh and Durham officials have proposed raising taxes in the coming year to fund a variety of programs.

Raleigh City Manager Russell Allen proposed a $642.8 million budget to the City Council Tuesday afternoon, calling for a 5-cent increase to the tax rate. Meanwhile, Durham City Manager Patrick Baker on Monday night presented his $356 million budget proposal that included a 6-cent increase in the tax rate.

Allen's budget would set Raleigh's tax rate at 38.17 cents per $100 assessed value. Last year's tax rate was 43.5 cents, but city officials rolled it back to 33.17 cents to keep bills even after Wake County's property revaluation.

The 5-cent increase would add $75 to the annual tax bill of a $150,000 house.

Allen said half of the tax increase is earmarked for paying down debt on bonds approved for city parks and for capital projects like widening streets and building a new law enforcement center downtown.

The city also needs more money to pay for services because of the slowing economy and rising costs, he said, noting city revenues are about $5 million below projections.

"We are seeing the impacts of a slowing economy, just as is affecting the nation (and) affecting the state," he said. "We do have in this budget, unlike in any other, we do have some major capital projects that need to be addressed."

About $3.2 million in new spending would be dedicated to public safety, including higher salaries for police officers and firefighters, 12 new police officers and the construction of a new fire station.

The proposed budget also includes 35 new employees at the downtown convention center, scheduled to open this fall, and 24 more employees for the municipal water and sewer system. Allen also called for a 15 percent increase in water and sewer fees paid by local customers.

Wake County Manager David Cooke on Monday proposed a budget that includes a 2.5-cent increase in the county's tax rate.

Raleigh City Councilman Philip Isley said the economic slowdown makes it a bad time to raise taxes.

"We're really going to be hitting folks in the pocket very hard," Isley said. "My hope is that we could lessen some of these increases, but that's going to be difficult to do, more than likely."

In Durham, Baker's proposed budget is $17.9 million more than the current budget and would set the tax rate at 56 cents per $100 assessed value. Last year's tax rate was 61.8 cents, but the city ro9lled that back to 50 cents after a property revaluation raised values across the city by an average of 24 percent.

The 6-cent increase in the tax rate would add $90 to the annual tax bill for the owner of a $150,000 house.

“As always, we’re listening to our citizens by continuing our focus on basic services,” Baker said in a statement. “We’ve also heard them say that a comprehensive yard-waste program is important and that they want us to focus on improving inner city neighborhoods."

The proposed budget would provide funding for a weekly yard-waste pickup at the same time trash is collected, including two leaf vacuum trucks. It also would provide money to revitalize distressed neighborhoods and for infrastructure and streetscape improvements in commercial areas and would allow the city to hire an extra inspector to enforce the housing code.

The budget also would increase public safety funding, staffing a new fire station in north Durham and allowing the Durham Police Department to hire up to 20 new officers.

Paying off bonds for repaving local streets and to improve parks and other infrastructure around the city necessitated part of the tax increase, Baker said.

A public hearing will be held on Durham's budget proposal at 7 p.m. June 2 at Durham City Hall. Raleigh will hold its public hearing at 7 p.m. June 3 at Raleigh City Hall.