Orange County will begin preparing a budget with no property tax increase. But that could change depending on what the state does to cope with its more than $2 billion shortfall.
The county expects only a 1 percent increase in property and sales tax revenue in the fiscal year that begins July 1. Property taxes makes up 75 percent of the county's general fund, which pays for the day to day expenses of county government and services.
The county commissioners had already indicated they want to avoid a property tax increase. Last night, Commissioners Steve Yuhasz and Earl McKee repeated their support for that stance.
But others, including Chairwoman Bernadette Pelissier, said it's still too early to commit to no tax hike. If the county takes on new debt for the construction of a new elementary school or water and sewer lines in the Efland/Buckhorn Road area, it may want to raise taxes next year to soften the blow the following year when the first payments come due.
Commissioner Barry Jacobs said the county may also vote to raise taxes to protect school funding if the state either takes money from the counties or increases local expenses for services previously paid for by the state.
For example, convicted criminals are staying in county jails longer because state prisons are full; the county does not get paid for that. Plus, in Orange, that keeps the sheriff from using jail beds for federal prisoners for whom the county is reimbursed.
"I think you're doing a very good job," Jacobs told County Manager Frank Clifton. "But I don't think you're even close to presenting us a worst-case scenario. ... I'm just not sure it [a budget with no property tax increase] is realistic."
Look for more on the county budget picture coming in Sunday's Chapel Hill News.