
NEW HANOVER COUNTY — Increased home prices in New Hanover County are expected to generate $127 million more to the county coffers with the current 45-cent tax rate, but early numbers show the county could potentially provide the same amount of services with a lower rate.
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County staff presented 2025 property revaluation projections to commissioners Thursday; they indicate keeping the tax rate at 45 cents per $100 could bring in an additional $127.29 million. This is on the lower end if the property valuation is at a 55% increase over 2021’s values. If it comes in at 65% or 75% higher, the added revenue would be $150.43 million and $173.57 million, respectively.
County staff also presented other scenarios — revenue neutral and same services adjusted for inflation.
To stay revenue neutral, the tax rate needed would be between 26 and 29 cents, per the same valuation estimates.
Chief Financial Financial Officer Eric Credle said staff would not be recommending dropping the rate that low. Because revenue neutral aims for the same amount of money brought in and doesn’t take into account inflation, this option would most likely need to be accompanied by budget cuts.
To provide the same services, adjusting for inflation, would require an additional $68 million in revenue. The county could accomplish this with a tax rate ranging from 38 cents to 33 cents, depending on the valuation increase.
Neither of these scenarios account for any increases to the general fund outside of inflation, say for an increase to the school district’s operating costs. The county is estimating around $69 million in enhancements or added costs to the general fund.
This estimate is separate from the inflationary adjustment of $68 million; if both numbers were accepted without any other budget cuts, the needed budget increase would be $137 million.
The commissioners have not indicated they plan to reduce property taxes; Friday’s meeting was only the first budget session and a mere introduction into the outlook of the next fiscal year. As such, the exact impact of the property valuation is not yet known.
The county tax department is still working on revaluations and residents will receive their tax bill based on that value once the tax rate is set, which would take place after the commissioners vote likely in late spring. The 2025-2026 budget goes into effect July 1.
Credle said Thursday’s estimates are based on home prices and anecdotal discussions.
Commissioner Dane Scalise said discussions he had with finance staff suggested the valuation could be a 40% increase, so he questioned if current projections were showing the revenue would at least see a 50% increase.
“That’s a very fair statement,” County Manager Chris Coudriet said.

As predicted by staff last year, the county appears to be in a less restricted place in comparison to last fiscal year, when property values were lagging behind inflationary pressures. The county also had to field increased budgetary needs from New Hanover County Schools and the sheriff’s department; the former faced a $20-million shortfall due to expiring Covid-19 relief dollars and declining enrollment.
The county chose not to increase property taxes nor dip into its $300-million Revenue Stabilization Fund, created by the sale of New Hanover Regional Medical Center to Novant. Instead, the county cut expenses in various departments by 8% and moved some expenses to its other funds, including ARPA and the Mental Health and Substance Use Disorder Fund.
This year, though, those items total $12 million and will most likely need to move back to the general fund.
Covid-19 funds from the American Rescue Act have now expired, and the county had committed $3 million to assist workforce housing initiatives and $975,000 to keep pre-K classrooms open at NHCS after the district lost its federal Head Start grant last year.
The Mental Health and Substance Use Disorder Fund was created in 2022 with $50 million intended to provide wraparound services for people before, during and after they seek help for a mental health or substance use disorder. The county used the fund last year to cover 47 school nurses and 35 therapists that had to be cut from the NHCS budget.
“I think it is a difficult proposition for the county to find itself using what is one-time money and cannot replicate or rebuild itself for ongoing expenses,” Coudriet said. “It made sense in the current year for the nurses and the school-based therapists, but you will go through that $50 million very rapidly.”
The county had been using the interest from the MHSUD fund to assist with one-time assistance, but Credle said this year they had to dip into the $50 million, what’s called the corpus, by about $8 million.
Coudriet went on to say the board could choose to continue using the fund for the nurses and therapists, but it would be depleted within five to six years at the same rate as now. Though the commissioners never intended the fund to increase exponentially in interest, bankrolling recurring expenses will limit the ability to provide money for larger one-time projects.
“We’d be in the same place just six, seven years from now,” Commissioner Rob Zapple said.
Additionally, the county estimates another $35 million is needed to address growth or reset funding levels, including restoring prior year budgets that may have been cut last year, paying debt service and addressing any increases in funding requests from NHCS, Wave Transit and Wilmington International Airport. Also included are costs of living salary and market/retention-based adjustments.
“We want to look at salaries for our hard-working employees, making sure that we are in the right range from our surrounding counties, and we are paying our employees the way we should,” NHCS Budget Officer Amanda Kostusiak said.
Around $22 million more is estimated for enhancements, including new facility operating costs — which include the new NHC Board of Elections building — software upgrades, personnel requests, equipment and trails.
“The budget team is working through them, vetting them, making sure it stays within our strategy and it enhances the county and our services,” Kostusiak said.
In summary, $69 million is needed to accomplish everything in those three buckets of funding — the reallocations, the growth adjustments and enhancements — all impacting the general fund.
Additionally, the $35 million and $22 million are only broad estimates this early on in the process — the schools’ budget, for example, won’t be submitted to the county until April 1, Coudriet said — and the commissioner may not want to pursue increases to all of them.
Commissioner Scalise has already indicated he intends to push for the elimination of the county’s Office of Diversity and Equity. Earlier this week he told Port City Daily the department was a “costly distraction” and the county should not be funding ideology. DE’s operating costs are $68,000, while the rest of its $600,000 budget goes toward salaries for five employees.
Scalise did not bring up the DE office in Thursday’s session.
The county budget team is also increasing its community engagement; it held five coffee shop meet-and-greets with the budget team to answer citizen questions, with more events planned later in the budget season.
The county has also launched a budget simulator on its website for residents to learn more about the budget and balance a hypothetical budget by plugging in how much they think each budget line should get.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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