Mecklenburg County Manager Dena Diorio on Thursday recommended raising taxes next fiscal year to help build dozens of new schools and pay for other projects that will cost billions of dollars over the next several years.
During her budget presentation, Diorio recommended increasing property taxes 1.6 cents more than the revenue-neutral rate to pay higher costs for services, fully fund a requested operating budget increase from Charlotte-Mecklenburg Schools and cover $4 billion in capital projects, which includes $2.5 billion for dozens of school projects and $1.5 billion for other county department needs.
The proposed budget’s property tax rate is 47.31 cents per $100 in assessed valuation. The revenue-neutral tax rate — what’s needed to bring in the same amount of money as this year — is 45.71 cents.
The next fiscal year starts July 1, and county officials will now work to finalize a budget before that date.
Budget director Adrian Cox said 71% of county residents could see at least a $15 increase on their property tax bill if commissioners approve the manager’s proposal. That’s also partially because of higher property values across the county after 2023’s revaluation.
The last hike was in 2019 when the board voted to set the property tax rate at 2 cents over the revenue-neutral rate.
“Steeply rising costs” and a choice to invest “in our people” makes it impossible to maintain a revenue-neutral rate, Diorio said.
“We have invested in our people and our community and those investments require continued support so the change needed can happen,” Diorio said. “This is the kind of generational change you want for a community that, as you know, there’s nothing easy about generational change. Mecklenburg County has faced challenges before and as your county manager I never shy away of doing what is hard.”
The proposed budget fully funds the Charlotte-Mecklenburg School board’s requested operating budget increase of $38.9 million. It funds most of the nearly $3 billion the school system requested to be on November’s ballot through a bond referendum. And the budget assumes the approved $2.5 billion would be on the ballot this November.
“We are proud to have such a supportive partner in the county,” Charlotte-Mecklenburg School Board Chair Elyse Dashew said. “Collaboration is hard work, and this collaborative relationship means a brighter future for the students, staff, and families of CMS.”
Included in the county’s allocation for CMS is $29 million for teacher raises. While the state pays most CMS teacher salaries, the county’s proposal allocates enough for average raises of 6.3% for locally funded positions.
“I’m very grateful that the county manager’s recommendation is supportive of the need for investment in our students and schools,” said Dennis LaCaria, executive director of CMS facilities, planning and real estate.
County commissioners did not speak on the budget after it was presented by Diorio Thursday, but are expected to get more details during a meeting scheduled next week.
Commissioners Laura Meier and Susan Rodriguez-McDowell, advocates for giving more money to CMS, beamed and clapped quietly as Diorio announced the county could fully fund CMS’ operating request.
CMS board member Jennifer De La Jara acknowledged past criticism from commissioners and the North Carolina treasurer about the steep amount requested to build news schools, and noted Guilford County borrowing $1.7 billion in bonds in 2022.
“Yes, it may be a large amount but numbers are relative. We have twice the population so it’s a relatively small bond amount in that context,” De La Jara said. “Obviously, I’m hopeful we get any amount passed because that’s what our students deserve.”
How much more money will tax hike raise?
The county’s $2.3 billion operating budget, which includes the county allocation to CMS’ operating budget, is $156.2 million higher than the current fiscal year — a 7.2% increase.
Residents dealing with inflation, an intense seller’s real estate market last year, bank failures, recession fears and revaluation all became important factors to maintain current services and invest in the county’s residents, Diorio said.
“While the budget aligns to the board’s priorities, a large component is dedicated to maintaining services at optimal levels,” Diorio said. “As was the case in prior years, county departments were asked to review all spending and identify realignments that could offset cost increases without impacting service delivery.”
County revenue from 1 cent of the increase would generate $28 million next year to pay off debt. The county’s debt total could include the $2.5 billion in CMS projects paid for through a bond referendum if commissionrs vote to put the measure ont he ballot and voters say “yes.”
No tax increase would be needed for a $1 billion bond referendum for schools, the county’s CFO said in March, But it would only be enough money for 10 projects the 30-project list.
Revenue from the remaining 0.6 cents in Diorio’s proposed tax hike would go into the county’s general fund and bring in an additional $16.7 million for the county.
The regular operating budget proposal includes a 3.3% salary increase for all county employees.
What does county’s capital projects plan include?
The following are items included in the $4 billion total capital projects plan:
▪ $2.5 billion for up to 30 school projects, including 12 elementary schools, seven middle schools, 10 high schools and a new athletic complex.
▪ $809 million for 10 county projects, including upgrades for court and detention facilities and community resource centers.
▪ $448 million for 37 park projects, including a new park at Eastland Yards, improvements for older facilities, lake dredging projects, skate parks and pickleball courts.
▪ $146 million for eight Charlotte-Mecklenburg Library projects, including relocation and expansion of the Sugar Creek and West Boulevard branches, a new branch on Nations Ford Road, renovation of ImaginOn and continued progress on the main branch in uptown.
▪ $107 million for four Central Piedmont Community College projects, including a new public safety training facility.
The Board of County Commissioners will meet Monday at 2:30 p.m. at the Valerie C. Woodard Center for a deeper dive into the allocations for each county department and hold a public hearing on the manager’s recommended budget Thursday, May 25, at 6 p.m. at 600 E. Fourth St.
Speakers can sign up at the meeting, register or comment in advance online, call 980-314-2914, or email Clerk@MeckNC.gov. The deadline to register or submit comments in advance is Wednesday, May 24 at 5 p.m.
Commissioners will hold straw votes on June 1 and are expected to adopt the budget June 6 at 6 p.m.
Anna Maria Della Costa contributed to reporting.