Paying Dix debt, affordable housing to require Raleigh tax increase

City Manager Ruffin Hall proposed Tuesday an $858.6 million budget for Raleigh for fiscal 2016-17 that includes a tax increase to provide more money for affordable housing and to help pay the debt the city took on last year with its purchase of the Dorothea Dix property.

The budget includes a 2-cent increase to Raleigh's property tax rate – after rolling back the rate following last year's countywide property tax revaluation – that would add $30 to the annual tax bill of a $150,000 house.

Half of the tax increase, about $5.7 million, would help pay down the $52 million the city borrowed last year to buy the Dix property from the state. The city is still in the planning stages of converting the 306-acre site, which formerly housed a psychiatric hospital, to a major park near downtown.

The other half of the tax increase would go to affordable housing, which Hall called a critical investment for Raleigh's neediest residents. The money would help fund a 60 percent increase in affordable rental units, from 200 to 325, across the city.

The proposed budget also includes the following:

• An average 3.25 percent raise for city employees
• $1.5 million for Raleigh police body cameras
• Money for a law enforcement training center and a new fire station to replace Station No. 1 downtown
• 12 new positions at the 911 call center
• 15 new positions to oversee downtown cleanliness, such as litter pickup and trash collection
• $850,000 for public art
• Money for a bike-sharing program
• $1.1 million to operate new or renovated parks, including Moore Square, Horseshoe Farm Nature Preserve, Forest Ridge Park and the Thomas Crowder Woodland Center

In addition to the tax increase, Hall also proposed several fee increases for public utilities, including $1 per month for stormwater management projects, 75 cents a month for solid waste disposal and $1.99 per month average in volume-based water and wastewater rates and infrastructure charges.

A public hearing on the budget is scheduled for 7 p.m. June 7 at City Hall. The City Council will hold 4 p.m. work sessions each Monday in June before voting on a final spending plan on June 27.