Monday, July 22, 2024

City passes $241M budget with slight tax increase, council raises, boosts affordable housing investments

WILMINGTON –– The City of Wilmington passed its $241.8 million fiscal year 2021-2022 budget Tuesday. 

Up $35 million from the current fiscal year –– a 14% increase –– the new budget necessitates a slight property tax increase, which will result in the average homeowner paying $36 more on their annual bill.

RELATED: With effective tax increase, commissioners approve $458M budget including staff, commissioner, and teacher raises

New Hanover County’s recent reappraisals resulted in an average 33% increase in property values. The revaluation process requires local governments to publish the revenue neutral tax rate, which essentially represents the rate at which residents would be taxed to keep revenue the same, while accounting for growth. 

The City of Wilmington adopted an effective tax rate increase of $0.0058 above revenue neutral –– “within a half a penny of the net neutral rate,” the city’s budget director Laura Mortell said in a budget presentation last month. 

The new $0.3808 city property tax rate represents a $0.123 reduction from the current rate, but will effectively function as a tax increase due to revaluations. 

For a home located in city limits valued at $250,000 last year and reappraised to $332,500 this year, city property taxes will increase from $1,246 to $1,266. The county’s new tax rate, $0.05 above revenue neutral, will garner $192 more in county property taxes on that same house, from $1,387 to $1,579. Combined, the total property tax bill would be $2,845, or $237 a month, up $212 in all. 

The city’s budget cites three reasons for the tax increase. First, the city is planning to spend $29.8 million toward its capital improvement plan (CIP) –– a 70% increase over the current fiscal year. Major projects included in the CIP include $8.3 million for street rehabilitation and $3.5 million for rail realignment efforts. 

Second, the city intends to keep its unrestricted fund balance above 30% of general operating expenses, keeping a healthy cushion for emergencies. 

Lastly, the city is assigning $5 million to fund affordable housing initiatives. Of this amount, $3.5 will be used for one-time expenses arising from the forthcoming recommendations from the joint city-county workforce housing committee. About $1.5 million will boost the city’s existing affordable housing programs –– a 156% increase from the current fiscal year. The Homeownership Program will be able to fund 15 loans and the Rental Rehabilitation Incentive Loan Program will finance eight loans for low-income families.

The investment in affordable housing in the upcoming budget represents the city’s highest amount ever allotted to the effort. 

Also included in the budget is a commitment to raise the city’s minimum wage to $15 an hour and a $1.95 million investment for a merit-based pay increase program for public employees. Fifteen additional roles are accounted for, with 1,105 authorized positions. Rising health insurance rates will cost the city another half-million, with employees still seeing rate increases on their end. 

City council will receive a raise as part of a three-year plan that will boost the elected officials’ stipends by 61% by fiscal year 2024. Tuesday, council approved increasing the mayor’s stipend from $15,228 to $19,035 and councilmembers stipend from $11,592 to $14,490 –– each representing a 25% increase. The stipends will increase by another 25% in fiscal year 2023 and by 11% in fiscal year 2024, to $24,517 for the mayor and $18,663 for council members. 

Similarly, New Hanover County Commissioners also voted to increase their salaries, which, according to commissioner Jonathan Barfield Jr., had remained stagnant for 13 years. Commissioners’ pay jumped from $17,890 to $31,200 –– a 74% increase. The chair’s pay was boosted 49%, from $26,074 to $39,000.

After approving the budget, Mayor Bill Saffo said he felt it supported the public’s stated desires –– “I think it was an outstanding job.” 

“This didn’t just happen overnight, folks,” he said. “This budget process has taken over five months.” 

Tuesday’s uneventful budget approval, sans any public comments, marks a distinctive turnaround from last year’s process. Then, at least five protesters from the George Floyd movement were arrested amid a heavy police presence.

Councilman Kevin Spears noted the lack of public participation in hearings and workshops leading up to Tuesday’s budget adoption. “We invited a lot of people to participate in this budget process and no one showed up,” he said.

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