Monday, June 27, 2022

New Hanover County proposes 2-cent tax cut, flat school funding after last year’s boost

The New Hanover County manager told commissioners decreasing the tax rate by 5 cents instead of 2 would require dipping into hospital revenue principal.

NEW HANOVER COUNTY — Whereas a year ago New Hanover County effectively raised taxes to multiply investments in schools, this year it is considering a somewhat opposite approach. Commissioners reviewed next fiscal year’s recommended $507-million budget Monday with a 2-cent tax cut and appeared uninterested in a request from New Hanover County Schools to up its funding.

The county could adopt the budget as soon as in 10 days, pending any hold-ups, or by the end of June at the latest.

If adopted as recommended, the fiscal year 2022 budget — which kicks in this July — would ease the tax rate to 45.5 cents per $100 of assessed value, representing roughly a 4.2% reduction.

“And you’re not being asked to compromise on any of your stated priorities,” county manager Chris Coudriet told commissioners during the morning presentation.

Last cycle, the board was split in the approval of the budget with a rate of 47.5 cents per $100 value, which was an increase considering tax revaluations. While Deb Hays and Rob Zapple preferred to keep taxes down, other board members — particularly chairwoman Julia Olson-Boseman — were set on doubling supplements for NHCS teachers to advance them to the highest paid in the state. Also as part of the deal, commissioners approved their own pay raises from $17,000 to $31,000.

Since the beginning of budget preparations in February, chairwoman Olson-Boseman has expressed a desire to shave 5 cents off the tax rate. While possible, Coudriet said the county would need to access around $15 million in principal from a $300-million escrow account, the only “readily available” funds. The money, designated for revenue stabilization, is part of the county-regulated profits of the $1.5-billion county-owned hospital sale to Novant Health.

From that account, the county is budgeting $2.4 million in accrued interest to make up for revenue lost from reducing property taxes. A projected 20% jump in sales tax income will also help make up the difference. Also from the hospital profits, the county is putting $4.9 million in principal toward its “community building” plan, an anti-violence strategy conceptualized after the New Hanover High shooting.

“I would like to see revenue neutral. I would like to see a 5-cent tax decrease, but I may be the only commissioner,” Olson-Boseman said, followed by silence.

It would require a supermajority of the commissioners, four of five votes, to use the principal in the escrow account.

The recommended budget also leaves the fire service fee at 7.25 cents for another year, increases the tipping fee by $4 and adjusts employee salaries by no less than 9.2%. Some first responders received salary increases last month.

Also in next fiscal year’s budget, public schools are projected to lose some money — down from $121.5 million to $119.9 million — due to a dwindling student population. Still, NHCS will remain ninth in North Carolina for percent of county appropriation, with the highest average local supplement at $9,000, the county manager reminded officials.

“This is not a cut to the school system,” Coudriet emphasized.

The recommended funding for NHCS is $5 million short of what the board of education asked of the county, a request made in part to raise pay for teaching assistants next school year. The recommended budget does not incorporate a $2.5-million proposed increase to the operating allowance to raise bus drivers, hourly custodians, teacher assistants and support associates to a minimum of $17 an hour. NHCS’ plea to adjust salaries of other classified staff would continue into fiscal year 2024 with a $2.69-million request and a $9-million ask in fiscal year 2025.

Even with the county’s support, district staff says it would need to cut 200-plus positions over three years to bankroll the improved wages.

“We have discussed extensively what our recommendation to you, as a staff, would be, even against the backdrop of what we thought the board of education’s request would be,” Coudriet said, “so no surprises here for the board, the community, the superintendent or the board of education.”

However, the county is recommending fulfilling $4.7 million in capital requests, which Coudriet said is money well invested to avoid rising construction costs. It intends to put forth $975,000 in Covid-19 relief funds from the American Rescue Plan Act to once again grow its pre-K offerings. Last year the county doubled locally funded early education classrooms from three to six, and this year it is expected to increase from six to 12.

A few other highlights of the budget include $80,000 for pickleball courts at Arrowhead Park, replacing the two tennis courts, long petitioned for by the sport’s community.

Cape Fear Public Utility Authority will receive $3 million for the “last frontier” project, to design and construct infrastructure in ​​northern New Hanover, the sector of the county that’s trailed behind in development. The county expects the investment to attract economic opportunities and assist with continued growth, Coudriet explained.

Salvation Army is slated for a $1-million grant for its new facility off Martin Luther King Jr. Parkway, and another $1 million would go to the design of a library in North Chase, the “last necessary branch” to ensure no resident lives beyond a 5-mile radius of library services. Construction would follow next year and the building would open within 36 to 48 months.

The county is expected to spend $5.5 million to build a standalone, 7,000-square-foot board of elections. Currently housed in the Northeast Regional Library, the elections operations would move closer to the county government center.

The proposed budget boosts several commitments to economic development agencies to match the market, Coudriet said. The county manager recommended a 9.2% increase on contracts, such as the Greater Wilmington Chamber of Commerce ($197,652), Wilmington Business Development ($282,391) and the Wilmington Film Commission ($145,992). In some cases, the raises were above the requested amounts.

Of 30-plus agencies that applied for nonprofit funding, $937,207 was dispersed. Cape Fear Habitat for Humanity, Inc. received the greatest contribution with $38,000 for Legacy Landing, a proposed affordable home subdivision in Castle Hayne. The New Hanover County Non-County Agency Funding Committee, which considers requests, said most organizations were planning salary increases this year and were asked to detail how those positions would be useful.

A hearing is scheduled for June 6 at 4 p.m. for the public to share feedback and thoughts on the recommended budget before the commissioners. The board will take its vote either on that Monday or by the end of the month.

View the full budget here.


Reach journalist Alexandria Sands at alexandria@localdailymedia.com or @alexsands_

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Alexandria Sands
Alexandria Sands is a journalist covering New Hanover County and education. Before Port City Daily, she reported for the award-winning State Port Pilot in Southport. She graduated from UNC Charlotte and wrote for several Charlotte publications while there. When not writing, Williams is most likely in the gym, reading or spending time with her Golden Pyrenees. Reach her at alexandria@localdailymedia.com or on Twitter @alexsands_

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