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Burlington/Mebane city managers propose budgets with large property tax increases – far above “revenue neutral” after reval

Initial budgets were unveiled Monday night by city managers in Burlington and Mebane to their respective city councils and both show significant increases in proposed property tax rates to take effect July 1.

State law requires that cities show a “revenue neutral” equivalent tax rate when budgets are prepared after a countywide revaluation. The revenue neutral rate is a projection of what the property tax rate would be after revaluation, given the increased property tax values.

While county commissioners have signaled an intention to keep the county’s overall tax rate at a so-called “revenue neutral” rate, the two city managers have proposed much higher rates than the revenue neutral estimates for their respective municipal jurisdictions.

Craig Honeycutt, Burlington’s city manager, is proposing a level of 49.73 cents, or 21.29 percent higher than the revenue neutral calculation for his city’s residents.  The city’s current tax rate is 59.73 cents per $100 valuation.

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See separate story outlining Burlington city manager’s budget proposal:

Revenue neutral would be 41 cents per $100 valuation.  Instead, Honeycutt is proposing a post-revaluation tax rate of 49.73 cents, 8.73 cents per $100 higher than the revenue neutral rate – a 21.29 percent increase above the revenue neutral standard.

Meanwhile, Chris Rollins, Mebane’s city manager, is also proposing a budget with a notable tax increase above and beyond the revenue neutral level for his city.

Mebane’s current tax rate is 47 cents, which Rollins proposes to cut to 38 cents per $100 valuation.  But that rate is 3.79 cents, or 11 percent, higher than the revenue neutral level of 34.21 cents.

See story outlining Mebane city’s manager’s budget proposal:

Both managers have designated considerable funding in their new budgets to higher salaries for their respective city’s employees.

Rollins included an across-the-board salary increase of 6 percent (adding about $805,488 to the city’s general fund, city officials project), plus another $287,951 for potential merit raises during the year.  Rollins initially described the merit raises as 2.5 percent, but finance director Daphna Schwartz said the amount is 2.75 percent.

Honeycutt has included $3.2 million to cover a full-year’s worth of police pay raises that the city council approved last fall that they approved at the time through lapsed salaries.

Honeycutt has also included a $6,500 proposed raise for Burlington firefighters, at a cost of $1.1 million.

Though he did not outline it during his budget presentation to the city council, in a subsequent interview, Honeycutt acknowledged that he had also included a 4 percent cost-of-living raise for all city employees, as well as up to 2 percent in additional merit raises; he said the total cost for both portions was about $1.2 million.


Water and sewer rates also to go up in both cities

          Both managers have also included higher monthly water and sewer rates for their respective residents – 6 percent in Mebane, 5 percent in Burlington.


Property tax values higher than county average in Mebane, slightly under in Burlington

          Earlier this year, tax administrator Jeremy Akins estimated the amount and percentage increase in property tax values that individual cities and towns could expect after revaluation.  The county average, Akins told commissioners, is up 79.43 percent.  Mebane’s increases are higher, 80.73 percent, Akins estimated, while Burlington’s are slightly lower than the countywide average, at 77.74 percent.

Read our editorial views on the two budgets:

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