GARNER — After weeks of back and forth with staff, the town council members appear to have settled on a budget with a one-cent tax increase, after no significant revisions were made during discussion at Tuesday’s work session.
Council expressed a desire to stick to the 2.75-cent tax increase promised in the approved 2013 bond referendum, so the goal would be to only raise the property tax another 1.75 cents next year. Since revenue growth projections are modest this year and next as the town awaits in-progress development to reach tax rolls, officials hope cuts will allow the town to feed an emergency services reserve to get over the hump the next couple of years while keeping to that goal.
“We said it’d be two and three-quarter cents, and that’s what I anticipate (the total increase by 2015-16) being, not above that,” councilman Gra Singleton said. “Barring a disaster or something horrible happening.”
Each penny of tax increase would cost the owner of an average Garner home ($170,000) an additional $17. When factoring in expenses such as water and trash fees, Garner’s effective tax rates on average homeowners rate among the lowest in the county, even though the 49 cents per $100 in value property tax is high, according to data compiled by town finance director Emily Lucas.
A one-cent tax increase would generate $297,000 to close the gap in a $26.56 million budget.
New cuts to the expenditure side of the budget will increase the amount available in a new emergency reserve fund by about $105,000 to a new total of nearly $175,000. Town manager Hardin Watkins said that would give the town a “head start” on filling in needs for the next budget.
Staff originally proposed the tax increase to help fund operational expenses for emergency services, especially Garner Volunteer Fire and Rescue – expenses that sluggish revenue growth failed to offset. Three new firefighters among other emergency expenses will continue to strain a growing budget as the county declines to up its contribution to what is normally a 54-46 share of funding the independent fire agency.
Added to more than $40,000 in cuts already planned in a presentation at a May 20 meeting: a $40,000 cut from police radio purchases and $28,000 to conduct a new pavement condition survey. The radio cuts went directly into the emergency services budget, $65,000 will technically go to the fund balance, though leaders indicated it would likely help fund emergency service needs next year.
Watkins and other staff members noted that most other towns in the area also were dealing with proposed tax increases this year to deal with rising costs. He said that in a meeting of not all but many town managers from the Triangle area including Orange, Durham, Johnston and Lee counties, other towns were reaching the same conclusion.
“Everybody in the room had proposed a tax increase. It was surprising; everybody had the same kind of message,” Watkins said during the meeting, adding afterward: “Everyone in the room was doing a tax increase except Morrisville, and Morrisville is increasing its storm water fee.”
No official action was made on Tuesday. There will be an initial public hearing at the June 2 council meeting, and the council plans to vote on June 17 in advance of the July 1 beginning of the 2014-15 fiscal year.
Councilman Buck Kennedy again emphasized the struggle of this particular budget effort.
“This has been the most frustrating (budget process,” Kennedy said. “Next year we will be really challenged. I hope it won’t be as difficult a task as it seems we’re in store for. I hope the 2.75(-cent increase) is still a valid number (for next year).”
Noting as he had in the past that revenue growth didn’t match town payroll growth, he asked if there was any council interest in discussing reducing merit-based increases for town employees from 3 percent to 2.5 percent to save about $57,000. No one expressed any.
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