SURF CITY — After contending with no property tax increase in 12 years, Surf City residents are bracing for a potential property tax surge. The rate is set to climb from $0.41 to $0.53 per $100 of assessed value.
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This 12-cent increase, an approximate 30% jump, was unanimously approved by the Surf City Town Council during their June 3 meeting. Town officials deem it a necessity to keep pace with the demands of a rapidly growing community, though concerns over the increase were voiced by residents at the same public hearing on the budget.
“There are people that can’t even stay in their homes because their property taxes have gotten too high that they’re having to sell their properties,” Surf City resident Tracy Brainer said. “It’s not acceptable to turn around and run people out of their homes because of the need and want to spend more money and take more from the people.”
According to Town Manager Kyle Breuer, the tax adjustment is primarily driven by the need to maintain and improve essential services for the 34% population increase since 2020 and address infrastructure and capital needs.
This includes the expansion of the fire station, sidewalk improvements, stormwater system enhancements and beach nourishment, among other items.
“As manager, I can’t stress enough it’s going to require us more effort to try to catch up if we experience a decline in service delivery or maintenance or capital investment,” Breuer stated, putting emphasis on being proactive rather than reactive.
While 2023 estimates from the North Carolina Office of State Budget and Management placed Surf City’s population at 4,798, town staff estimates a current population of around 5,373. Yet, this comes without a property tax increase in more than decade, so the town’s resources have been stretched to meet the escalating demands.
“So basically for eleven years, we have had no tax increase,” Mayor Teresa Batts said at the meeting. “We have, in some places, robbed Peter to pay Paul.”
On April 25, Breuer presented a total budget of just more than $36 million. The primary revenue source for the town is the ad valorem tax, expected to bring in about $10.8 million. Other contributions come from local sales taxes at $2.86 million, solid waste fees at $1.41 million, and utility fees at $8.76 million.
In the current fiscal year, Breuer said the budget requests exceeded expected revenue by more than $3.2 million, necessitating the tax adjustment.
Specifically, Surf City Fire Department has experienced a 46.6% increase in emergency calls over the last five years. To address growing demand, SCFD must raise minimum staffing, with a phased plan to add 12 positions over the next three years. Three captains are planned to be added this year.
The additional revenue generated by the tax increase will directly fund several key initiatives:
- Public Safety Enhancements: This includes two additional police officers and fire personnel hires, replacement of aging vehicles, fire department air pack replacements, and the $1.5 million expansion of Fire Station 25.
- Infrastructure Improvements: Funds are allocated for advancing capital improvement projects, including $250,000 earmarked for sidewalk improvements. Stormwater system enhancements will focus on proactive maintenance and capital upgrades to reduce flooding risks, while various street improvements will encompass paving, repairs, and traffic flow enhancements.
- Public Communication: The increase will support enhanced public communication and digital accessibility through a new website and forthcoming mobile application.
- Beach Nourishment: As part of the town’s long-term beach renourishment strategy, 10 cents of property taxes will be allocated to fund beach renourishment projects. An upcoming Coastal Storm Risk Management (CSRM) project, a major beach nourishment effort on the East Coast set to start in December 2025, will cost the town about $32 million.
- Personnel Funding: $450,000 will be allocated for a 2.8% cost-of-living adjustment and 2.5% performance pay, a move based on a recent pay study to maintain competitive wages in Surf City.
To secure the funding required, town staff and council members explored alternatives to raising the tax rate such as deferring improvement projects, reducing non-essential services, and utilizing fund balance reserves. However, council members found these options were deemed insufficient to provide the revenue necessary for operational demands and long-term capital investments, making the tax increase the most sustainable and responsible choice.
“Raising taxes is never an easy decision, but it is a necessary step to ensure the continued financial health of our town,” Batts said during the meeting. “What used to be a small beach town is now a town with a beach, and we have to be responsible.”
Breuer stated the long-term impact of the 2025-2026 budget and tax rate is to reduce Surf City’s reliance on one-time revenue sources, such as grants. In July 2024, Surf City received a grant of $331,535 from the North Carolina Resilient Coastal Communities Program to support a roadside infiltration resilience project.
However, the increase sparked concerns among some residents, particularly in light of an upcoming county-wide revaluation. Pender County’s next property revaluation will be effective January 1, 2026. A property revaluation updates a property’s assessed value to reflect its current market worth, directly influencing the amount of property tax owed.
“I’m afraid that if this year you raise the taxes, and next year, when the property values go up, are you going to reduce the taxes, and are you going to reduce that for the 12 cents you’re raising now?” Surf City resident Andy Plyle said. “You should really delay the tax rate till next year and see what the new property value is and will be.”
While a revaluation aims to ensure fair taxation by bringing property values closer to their true market price, it can lead to significant increases in assessed values for many homeowners. When a property’s assessed value increases, even if the tax rate remains the same, the actual tax bill will go up.
During revaluation years, governments are required by law to publish the revenue-neutral rate, meaning revenue is balanced with expenses, whether or not they vote for it. For instance, in New Hanover County — which saw a 67% property value escalation this year since 2021’s revaluation — government officials are debating whether to vote down the rate from 45 cents to 33.9 cents or revenue-neutral at 29.2 cents.
Plyle’s concern addresses the potential for a double whammy — a tax rate increase from Surf City, followed by a potential increase in their tax bill next year due to a higher assessed value from the Pender County revaluation.
Surf City officials have not explicitly stated a commitment to a revenue-neutral rate in 2026.
Other residents, like Anthony Ricciardi, acknowledged the increase as necessary to keep up with the town’s growth.
“This is going towards helping the town, helping everyone in the town. And I know it sucks, but it’s life,” Ricciardi said. “There’s so much more stuff going on in this town, more road work, more cops, more firemen are needed. Everyone on this board has to pay taxes too, all of their taxes are going up, not just everyone here.”
Have tips or suggestions for Charlie Fossen? Email charlie@localdailymedia.com
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