The county and its residents have adapted "to unprecedented change" in work, technology, health care and civic life, Orange County Manager Bonnie Hammersley said in her budget message. The focus now is on personal and economic recovery, she added.
"The recommended budget reflects optimism for the future and improves upon the county's resilience while addressing the economic realities facing the county today," Hammersley said.
The 2022-23 budget includes $258.1 million for daily operating costs — a $24.1 million increase over this year's budget. It would take effect July 1.
The budget would raise the property tax rate by 1.25 cents to 83.12 cents per $100 in assessed property value. It also uses $2.6 million in county savings to fill the gap between available revenues and planned spending.
The additional penny would add $2.2 million to the local schools budget, County Manager Bonnie Hammersley told the county commissioners. The other quarter-cent would help pay the county's debt, which could fall slightly next year to $38 million.
Roughly $40.6 million of the proposed budget would cover big-ticket purchases, including construction projects and new vehicles.
Multiple Challenges, ARPA Money
Hammersley noted the budget was drafted with several conditions in mind, from rising prices for fuel and other goods to a labor market shortage and regional competition for quality employees. Inflation continues to grow, after showing 8.5 percent growth between March 2021 and March 2022 — the largest 12-month increase since December 1981, she said.
Sales tax revenues also continue to climb, with a second year of double digit increases. However, Hammersley urged caution in planning for next year, noting the economy could slow down and the Federal Reserve could raise interest rates to counter inflation.
Still, the county anticipates having an extra $16 million next year to meet its challenges, wean some programs off federal grant money, and invest more dollars in education and public safety, Hammersley said.
The budget also is focused on staff turnover, which grew from a rate of 8.7 percent last year to 13.5 percent this year, Hammersley said. Emergency Medical Services and the Orange County Sheriff's Office could see the biggest increase in staffing, with eight new Emergency Medical Technicians, four paramedic trainees, and 15 new detention officers proposed.
Additional money also is slated for education, with roughly $93.6 million to fund the Chapel Hill-Carrboro City Schools and Orange County Schools. The total is about $10.9 million less than the districts asked for this year. But the proposed spending — $4,808 per pupil — would represent the highest per pupil increase in the county's history, she said.
The county also will continue to spend its $28.8 million share of federal American Rescue Plan Act funding, with $10 million being used to bring high-speed broadband service to underserved homes and businesses.
Another $12.3 million has been earmarked for social services and housing, including a locator system and helpline, landlord incentive program, emergency housing and efforts to end homelessness. The county also anticipates using $540,000 to continue a state childcare subsidy program that started during the COVID-19 pandemic. The program is expected to end in June.
That would leave about $4.8 million available for future needs, Hammersley said.
A plan for spending federal ARPA dollars must be in place by Dec. 31, 2024, and all the money has to be spent by Dec. 31, 2026.
What About Property Taxes?
The commissioners have talked with county staff for several years about how to pay for long-term building and other capital needs, including over $300 million in delayed school repairs and renovations in both districts.
In 2020, the county delayed a planned 1.67-cent tax-rate increase because of the pandemic. The commissioners then raised the tax rate last year by 3 cents, following a property revaluation. ARPA dollars allowed the county to delay an additional 1.15-cent increase.
This year, the rate could grow 1.25 cents, from the current 81.87 cents per $100 in assessed property value to 83.12 cents.
That would generate a $2,909.20 county property tax bill for the owner of a home valued at $350,000 — an increase of $43.75. Property owners in the towns and the Chapel Hill- Carrboro school district pay additional property taxes.
The commissioners also set the city schools property tax rate, which Hammersley recommended keeping at 18.30 cents per $100 in assessed property value.
A penny on the county's tax rate generates roughly $2.2 million.
Chapel Hill-Carrboro, Orange County Schools Funding
The Chapel Hill-Carrboro and Orange County Schools would share $93.6 million in local funding next year, in addition to state and a small amount of federal money.
The $4.3 million increase over this year's budget would give the districts $4,808 in local dollars for each student — a $441 increase.
The county allocates local dollars based on each school system's student enrollment. Chapel Hill- Carrboro would receive 58.8 percent of the local dollars, or $55 million. Orange County Schools would get 41.2 percent, or $38.6 million.
The county budget also spends $28 million on school construction, maintenance and technology projects, as well as $3.7 million for school resource officers in the middle and high schools, and nurses in all the schools.
School board members said in a recent joint meeting with the commissioners that the requested budget increase is largely aimed at boosting employee salaries and support services for students facing social, emotional and academic challenges following the COVID shutdown.
The city schools would receive $25.1 million more from the district tax. Property owners who live in the county school district do not pay a school district tax.
What About County Employees?
Staff salaries and benefits account for over 71 percent of the county's expenses after paying for schools.
Next year's proposed budget includes a 3 percent pay increase for all county employees. They have gone two years without a raise. The county also will increase its living wage for all permanent and temporary employees to $15.85 an hour, an increase of 45 cents.
Another $426,000 is budgeted for performance awards, which could add up to 50 cents an hour to an employee's salary, and the county also will resume travel for conferences and training, at an estimated cost of $514,202.
Nearly $1.8 million in additional spending will cover increases in employee health, retirement and disability benefits. Money also is budgeted for new jobs in several departments, including animal services, the Local Reentry Council, parks, social services, and the Orange County Health Department.
Other Budget Highlights
— Six fire departments — Damascus, Efland, Eno, New Hope, Orange Grove and Southern Triangle — have asked for increases of a penny or more in the tax rates charged to residents who live in their fire service districts.
— The cost for a COVID vaccination or booster shot through the Orange County Health Department would cost $65 each. The shots now are provided for free.
— Rental fees are established for special events, weddings, and the amphitheater under construction at Blackwood Farm Park on N.C. 86.
— The fees charged when an ambulance responds to an emergency call or to take someone to the hospital would increase after more than 10 years without an adjustment. The per mile rate for an ambulance ride would grow from $7.50 to $12 per mile.
What's Next
— The commissioners will hold budget public hearings on May 10 and June 2.
— Work sessions to discuss parts of the budget are scheduled for May 12, May 19, May 26 and June 9, when the commissioners will consider any amendments and cast a preliminary vote to approve the budget.
— The final vote to adopt the 2022-23 budget is June 21.
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