The New Hanover County Board of Commissioners adopted the $317 million 2016-2017 fiscal year budget Monday morning, which includes a 4.9 cent tax increase on every $100 of assessed property value. The budget goes into effect July 1.
The 4.9 cent increase comes one year after the same board approved a two cent tax increase per $100 of assessed value, bringing the total tax rate to 62.3 cents per $100. It is an 8.5 percent increase over last year’s rate of 57.4 cents. Both increases, according to County Manager Chris Coudriet, will go exclusively to the debt service fund to pay off voter-approved bonds.
“Those dollars are going to be budgeted in the very way that we have indicated to you for the last two years, that any increase in taxes, every one of those pennies will be directed to debt service reserve,” Coudriet said, noting that the tax rate going to the general fund has remained steady at 55.4 cents per $100 since at least July 1, 2012. “We’re now effectively paying on $340 million of voter-approved debt.”
In 2006, voters approved a combined city and county $35.5 million parks bond. In 2008, residents voted for a $164 million bond for Cape Fear Community College, part of which went to fund the Wilson Humanities and Fine Arts Center. The last bond, which was on the ballot in 2014, pledged $160 million to the public school system.
With this latest increase, which was originally 5.5 cents until bond refinancing put the county in a better position and lessened the need for such an increase, Coudriet said that there would be no need for future increases in the next few years.
“You do not have voter-approved bonds scheduled anytime in the near future, and the earliest likely question will come from the school system in calendar year 2020, which means if there were to be discussion of tax increase, it would be then or later,” Coudriet said. “We can continue to make good on our commitment that this administration will not ask for a property tax increase for anything other than voter-approved debt.”
Commissioner Rob Zapple remarked that until last year, nothing had been done to address the debt service, and he saw the increase as overdue.
“I think it’s important to note and emphasize that the voters of New Hanover County approved $340 million in bond debts starting in 2006, in 2008 and again in 2014, but nothing was done until last year to establish revenue sources to pay back the debt,” Zapple said. “[After this], there will be no future requests for the payment of these bonds.”
In addition to addressing the debt service fund and ensuring the long-term financial stability of the county, the priorities of the coming budget, which is nearly $15 million higher than last year, are public education and safety.
The biggest chunk of money will be going to the New Hanover County Schools system, as the per-pupil spending was raised from $2,620 to $2,660. Cape Fear Community College will also be receiving $10.4 million in operational funds, matching their allocation from last fiscal year.
The New Hanover County Sheriff’s Office received funding for 21 new positions, including more detectives with the gang task force and opioid task force to help address the ongoing gang, youth and drug issues in the area. Eight detention officers will also be added to the county jail.
The fire services district ad velorum tax rate remains steady at 0.07 cents. In the environmental management department, the waste tip fee was reduced $2 from $52 to $50 per ton and will remain at that rate until the 2018-2019 fiscal year. It was the third year in a row the tip fee was reduced, resulting in an 8 percent decrease over that time period.
The budget was approved by a 3 – 2 vote, with Chairwoman Beth Dawson, Vice Chair Jonathan Barfield Jr. and Zapple voting in favor of it. Commissioners Woody White and Skip Watkins dissented without comment.
Dawson said the budget reflects the wishes of the voting residents of the county.
“This budget supports the overwhelming support and the will of the voters, who have overwhelmingly throughout the years voted in favor of bond referendums to support education, our community colleges, and our schools as well as our parks, clearly stating that they’re in support of quality of life initiatives,” Dawson said, noting the county is double triple-A rated by the major bond agencies. “This is a very responsible and prudent budget.”
Zapple agreed, reiterating that it’s time to make good on those payments.
“Addressing the need for revenue for debts that were approved by the taxpayers is the fiscally responsible thing to do,” Zapple said. “Resolving these debts, which should have been addressed long ago, will allow our county government to move forward and plan for the future. There is no such thing as free money, and in my opinion, it is time to act responsibly and pay the bill.”