NEW HANOVER COUNTY — Facing pressure from constituents and tax-rate proposals from area municipalities, New Hanover County commissioners asked for a reduction in the county manager’s proposed property tax rate.
READ MORE: Republicans lean toward further reducing NHC tax rate, NHCS capital ask diluted
County manager Chris Coudriet presented his recommended budget with a 35-cent property tax rate at Monday’s meeting, a 10-cent reduction from the current rate. Based on the new average home value of $581,000, this would result in a monthly bill increase of $39.
Now he will need to further reduce spending to 33.9 cents at the behest of Democratic Commissioner Rob Zapple, supported by Commissioner Stephanie Walker. The 33.9-cent rate is the amount identified by Coudriet as necessary to keep day-to-day services running; the remaining 1.1 cents is for long-term debt service.
“After listening to my fellow commissioners and the many emails that we have received from the public, I am requesting that you and our staff do the impossible,” Zapple said, directing Coudriet to relook at proposed enhancements and bring back a different proposal before the next meeting on June 2.
Republican Bill Rivenbark said he would like to see the 33.9-cent option as well, despite his fellow GOP commissioners, Dane Scalise and LeAnn Pierce, pushing for a revenue neutral rate of 29.1 cents — or the rate needed to bring in the same amount of money with higher property values. Values have increased 67% since 2021; this results in higher bills for property owners, mitigated through a lower tax rate.
Zapple has been a proponent of new additions to the budget suggested throughout the budget cycle, including a truancy reduction pilot with New Hanover County Schools, increased building inspections, and additional manpower at the board of elections.
Coudriet recommended a budget totalling $488.5 million, a $40-million increase from the current fiscal year, to restore previously cut budget lines, address inflationary and cost-of-living increases, and add to the current services provided by the county. These include:
- An additional $8 million for New Hanover County Schools’ operating budget
- $5.1 in public safety upgrades
- $4.2 million in market and merit salary increases
- $1.7 million for Scotts Hill water lines
- $2.82 million for committed continuance of Project Grace
This budget still requires other funding sources, aside from the general fund where property and sales tax revenue is deposited, to be able to reduce the rate by 10 cents. Commissioners can’t rely on an increase in sales tax revenue, which has remained flat for the last few years.
The recommended budget includes $8.1 million from the fund balance, $6.6 million from interest accrued in the Revenue Stabilization Fund, along with $5.6 million from the $50-million Mental Health and Substance Use Fund to cover strategy programs and mental health therapists.
Pulling from the $300 million Revenue Stabilization Fund was a sticking point for the commissioners’ Republican majority last budget cycle; commissioners Pierce and Scalise advocated for cutting expenses instead.
Though they didn’t take issue with the RSF this budget cycle, Scalise and Pierce did want to cut spending. They both indicated they may not vote for a budget implementing a tax rate above revenue neutral.
“There’s a lot of people that are hurting out there and that’s why your sales tax numbers are down,” Pierce said. “They’re not out there spending money … they’re staying at home and I think that the government needs to stay at home too and keep our money close and put more money in the pockets of the taxpayer.”
Pierce, former mayor of Carolina Beach, said if Wilmington and the beach towns could stick with revenue neutral (Wilmington’s proposed rate is actually one-tenth of a cent above neutral) then so could the county. She also noted choosing a rate above the 29.1 would affect how sales tax is distributed throughout the county, giving more deference to the county.
ALSO: Wrightsville Beach opting to reduce tax rate despite revenue losses
ALSO: Beach towns divided over potential New Hanover tax rate, sales tax impact
Philosophically, Pierce described the proposed enhancements as “growing the government,” something she couldn’t stand behind. More specifically, the commissioner didn’t agree with the additional positions in the recommended budget.
The county manager’s proposal includes numerous positions to staff the county’s recent expansions, including the Northchase Library with 13 full-time positions and Project Grace with nine. Other new positions are one or two additional in various departments — I.T. security, passport administration, veterans outreach, and communication and marketing at the board of elections, parks and gardens supervision and the sheriff’s office for additional court security.
The county received even more requests for more people that are currently unfunded; total unfunded requests numbers $5.2 million and includes 32 full-time positions.
Scalise questioned the need for all the proposed enhancements as well, specifically pointing out the $3 million planned for workforce housing. The funding is the fourth installment of a five-year, $15-million commitment previously to improve workforce and affordable housing stock in the county.
“I’d like to get rid of that, absolutely,” Scalise said. “Doesn’t mean that I don’t like housing. It doesn’t mean that I don’t want to help with affordable housing, but I didn’t vote for that initiative, and that’s a very large expenditure of money that, in my opinion, we could do away with.”
Scalise also took aim at the non-county agency funding, or money that the county provides to nonprofit service providers in the community decided via committee. Committee chair John Hinnant, also chair of the New Hanover County GOP, discussed next fiscal year’s funding recommendation for the 61 agencies that applied — $1.6 million out of almost $3.1 million in total requests. Scalise said he would like to see the New Hanover Community Endowment take full responsibility for that funding.
Throughout budget discussions, Scalise has reiterated government should fund basic functions as mandated by the state and leave the rest to other agencies.
Coudriet included a breakdown of mandated services in his presentation Monday, though the amounts dedicated to these items is discretionary. They include facilities management, social services, school capital expenses, and the sheriff’s office, among others. The budget showed 72% of the county’s spending is going toward those.
“All that’s mandated by the state of North Carolina is a sheriff and two deputies,” Coudriet explained. “Well, we cannot provide the level of public safety and community that 245,000 people expect with a sheriff and two deputies.”
The county spends 11% on mandatory services where the spending amount is fixed — Medicaid distribution, debt service, environmental health and risk insurance.
The remaining amount — 17% of the budget — is spent on items the county is not required to fund — libraries, the Senior Resource Center, counseling, dental health programs, and non-county agencies. It also includes parks, like the 60-acre Flossie Bryan tract the county is planning to dedicate as open space. The recent purchase carries a net cost of $3.86 million, funded from the Revenue Stabilization Fund. Scalise was that project’s champion.
As Zapple pointed out, the county has more funding responsibilities than a municipality, though Pierce pushed back on this notion. She noted the City of Wilmington has its own police and fire departments, roads and streets, and infrastructure, including water and sewer.
North Carolina law only requires municipalities to do one thing: maintain the State Building Code. If a city, and not the state, own roads, they generally need to maintain them to keep them accessible, but law enforcement, garbage collection, and building other infrastructure is technically not required, and some smaller municipalities may choose to partner with the county they’re in on those services.
The bare minimum, though, was not enough for one commissioner.
“I won’t vote for a budget that leaves behind our teachers, deputy sheriffs, our employees, our firemen, and our emergency personnel,” Zapple said, noting the revenue-neutral rate would eliminate cost-of-living increases for current employees. “I won’t do it.”
[Editor’s Note: A previous version of this story incorrectly stated next fiscal would be the first installment of workforce housing funding and that it had been funded through ARP money every year. It was only funded with ARP in the 2024-2025 fiscal year. PCD regrets the error.]
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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