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Burlington’s city manager proposes tax rate almost 9 cents above revenue neural

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Burlington’s city manager has rolled out a proposed budget that calls for a property tax rate nearly 9 cents greater than what the city would need to break even after Alamance County’s latest revaluation.

In order to make ends meet in the new fiscal year, city manager Craig Honeycutt has recommended a new tax rate of 49.73 cents for every $100 of property value. Honeycutt added that, with each penny of property tax worth about $699,000, his proposed tax rate would bring in about $38 million a year – or just under half the $78.8 million that he expects the city’s general fund to expend during the 12-month cycle that begins on July 1.

Although a full 10 cents less than the city’s current property tax rate of 59.73 cents, the city manager’s proposed rate amounts to an increase of 8.73 cents over the “revenue neutral” level of 41 cents, which the county’s tax office estimates the city would need to break even after the countywide revaluation that went into effect earlier this year.

Honeycutt told Burlington’s city council that he’s seeking the additional property revenue in order to fund some anticipated increases in the city’s existing programs and services. He zeroed in specifically on some substantial salary hikes that his budget strives to absorb in the new fiscal year.

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Burlington city manager Craig Honeycutt and finance director Peggy Reece.

“We’ve taken some very aggressive steps with the city council to address some of our shortcomings especially in public safety,” the city manager added. “We’ve estimated that police, fire, and other personnel costs is 8 cents [worth of the requested property tax increase].”

Honeycutt went on to note that his budget earmarks about $3.2 million for an increase in police compensation that the city council approved in November. He added that, thanks to these unprecedented salary hikes, the police department’s vacancies have dwindled to nine openings – as compared to the 50 or so that he speculated the police department would otherwise have.

Honeycutt also alluded to another $1.1 million increase that would cover a $6,500 pay raise that he aims to give each of Burlington’s firefighters in the new fiscal year.

The city manager later told The Alamance News that his budget contains another $1.2 million in order to fund a 4-percent “cost of living adjustment” for all city staff as well as a merit-based raise worth up to an additional 2 percent.

In light of these two multi-million-dollar pay packages, the city manager said that he has been loath to accept most of the requests that the city’s departments have submitted for new staff-level positions. In fact, Honeycutt said that the only new post he chose to include in his budget is a cross-jurisdictional animal services worker who is expected to cost Burlington $11,000 a year.

“We wanted to make sure that we took care our own assets,” the city manager added, “before we expanded our staff.”

In addition to the budget’s personnel-related increases, Honeycutt acknowledged that he has also set aside $2.4 million to cover inflationary hikes. He went on to recommend more funds for deferred maintenance projects, an outlay of roughly $454,000 to lease radios for the city’s emergency communications, and a proposed loan for $5.8 million to cover a variety of other capital needs.

The city manager also conceded that the city can no longer count on record-breaking sales tax receipts to cover its costs. He noted that, at last check, the city’s sales tax revenues were expected to go up $1.8 million in the new year, as compared to the current year’s increase of $4 million.

Honeycutt went on to confess that the city’s anticipated financial difficulties are even expected to plague the city’s standalone water resources fund, which relies on revenue from utility fees to operate the city’s water and sewer systems. The city manager added that his budget calls for a 5 percent increase in fees to ensure that these municipal services remain above water.

Despite their potential impact on the pocketbooks of area residents, Honeycutt’s recommendations generally seemed to go over reasonably well with the members of Burlington’s city council.

In the view of Burlington’s mayor Jim Butler, the city manager’s spending plan accounts for many of the uncertainties that exist in the city’s financial future.

“There’s the economic unknown; there’s the inflationary-moving-forward unknown; and then there’s the reval,” Butler told the rest of the council. “There are still appeals out there…and the ultra reality is that we don’t really know 41 cents is revenue neutral.”

Meanwhile, councilman Bob Ward suggested that he would be comfortable with a 49.73 cent rate in the new year – as long as it isn’t a prelude to further hikes in the future.

“Any way you come at it, it’s going to be hard to go to a straight revenue neutral,” the councilman added. “However, I would like to think that, somewhere down the road, if we settle on 49.73, we think next year about putting things into a bond package…so we can keep this rate for some period of time.”


Read our editorial views on the budgets in Burlington and Mebane: https://alamancenews.com/whopping-city-tax-increases-proposed-in-burlington-mebane/

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