Century 21, Durham, NC Joyce Bliss REALTOR® 919-308-1215

City Counsel Starts Draft Towards Property Tax Increase

 Herald Sun had an article discussing ways to balance the upcoming year’s City budget — Council Open to Raising Taxes. The article discussed the projected gap in next year’s budget, estimated by some to be about $13Million, and the need to deal with some deferred road maintenance to the tune of at least $1.5Million [dealing with all the deferred maintenance would be $19Million] . The Council is apparently looking to cover the shortfall with a combination of spending cuts and a property tax increase of as much as 5.8 cents per $100 — an 11% increase over current rates. The Council is also considering a bond issue to deal with the backlog of maintenance projects.

Some semi-random thoughts;

There will be a property tax increase this year. The Council wouldn’t be talking about it in February unless they were laying the groundwork for passing an increase later this year.

While they say they will use a mix of spending cuts and a tax increase, expect much fewer spending cuts and a larger tax increase. After all, when has any government really been successful at cutting spending? I’d be surprised if the rate increase wasn’t at least 4 cents per $100.

As a citizen, I’d be really concerned with the level of deferred road maintenance, and even moreso with the idea of taking on additional debt to take care of it. It’s just like your personal budget — if you have to add debt to cover your regular monthly expenses, you are living beyond your means.

It will be interesting to see how this develops over the next couple of months, There are two ideas here. First of all, we all know that raising taxes in a recession is bad. We also know, however, that the City must keep a certain level of funding to keep it’s AAA bond rating. When idea wins out will be come clearer when the official budget is unveiled later this year.