Property tax rates would increase for the third time in six years if City Council follows budget recommendations made Monday by the city manager. An increase of one penny, to 48.87 cents per $100 of valuation, is included in the $694 million operating budget for fiscal 2019.
Taxes on a home worth $150,000 — the median price in Charlotte — would go up $15 per year if the rate increase takes effect. Annual fee increases of $23 for water, $6 for storm water and $7 for garbage collection are also in the budget proposal, meaning most residents would pay $50 or more combined in higher taxes and fees over the next year.
In fiscal 2018 — which ends June 30 — there was no property tax hike, but garbage fees went up by $6 while water rates increased by $21.
Top priorities in this budget include raising salaries for police to help close a vacancy gap of 10% among the department’s 1,900 approved jobs and other incentives, including city contributions to a retiree health-care fund, and tripling the amount of money for affordable housing over the next two years.
Marcus Jones, the city manager, noted that his recommendations include pay raises of 3% for city employees, with the exception of public safety employees. Police officers would receive an average pay bump of 6.5%, including starting salaries as high as $51,000 for new hires who have a four-year college degree. Starting pay for policemen, now $43,492, would go to $46,352. Mid-range and top-level raises would also increase to reduce turnover.
Police sought raises of 15% in February during a presentation by the Fraternal Order of Police to council.
Firefighters would receive raises of 4% to 6.5%, with the exception of the most senior employees, who would see salaries grow 1.5%. The fire department has a job vacancy rate of 1.9%, about 80% lower than CMPD.
Health-care premiums for all city employees will be flat in the fiscal year that begins July 1 and ends June 30, 2019. The city employs 8,000 people. Jones called the flat premiums “great for our employees” because it increases the net gain of employee salary gains.
A majority of the 11 council members must approve the city budget before it takes effect. Council will consider adjustments to Jones’ recommendations at the end of this month and finalize the new budget on June 11.
“We now have the manager’s budget and it’s our time to begin to analyze it,” Mayor Vi Lyles said after Jones outlined his budget Monday afternoon to council.
Citizens can ask questions and comment on the budget during a public hearing on May 14 at the Government Center, followed by adjustments by council on May 15 and 30 before the final vote.
Republican councilman Ed Driggs responded to Jones’ budget by asking why Jones and city administrators failed to avoid pushing for a tax hike despite a long-running construction boom and low unemployment rates that have led to rising property and sales tax revenue.
“Even so, it appears we can’t pay our police properly without a tax increase,” Driggs, who is vice chair of the council budget committee, told me. “Those are questions I feel should be answered.”
He also expressed frustration over the tax rate increase surfacing for the first time Monday. “It was not mentioned in any council meeting before today,” Driggs said, noting council colleagues declined his request this spring for a special meeting to delve further into police pay and compensation.
Including all spending, Charlotte’s budget would grow to $2.6 billion under Jones’ plan, compared with the current $2.4 billion. So-called enterprise funds — fee-driven city departments overseeing water, storm water, transit and the airport — account for $1.4 billion of that amount.
General operating funds, the portion of the budget driven by property and sales tax revenue, would grow 3.7%, to $694 million, with another $506 million dedicated to paying for long-term investments such as roads and other infrastructure approved by voters every two years.
Operating spending increased 5.3%, or $34 million, last year to $669 million, while Jones is seeking 3.7%, or $25 million, more in fiscal 2019.
“We provide a basket of services,” Jones said of city government during a press briefing. “We, as residents, hope to have value in that basket of goods and services. … We’re providing more enhanced services, a better product at the end.”
Before the budget process began, city departments found a combined $14 million of savings through contract revisions and improvements, spending reductions and shifts in how some city jobs are done without hurting existing services, Jones said.
Adding a penny to the tax rate will generate $9.8 million. Police pay raises and incentives, including a phased-in program to have officers use their vehicles at work and at home, would cost $7.4 million. About a quarter of the additional property tax money would be used to help pay for a two-year $50 million investment in affordable housing, up from the current $15 million.
Affordable housing has become an increasingly prominent topic in local politics, driven, in part, by protests and riots in uptown in 2016 as well as Charlotte’s dead-last ranking among major cities in economic mobility.
Because of existing bond commitments, the affordable housing budget would shrink to $25 million in 2020 — still higher than the current two-year spending cycle. Beginning in 2022, council and the city manager would determine whether to increase that amount while balancing other priorities.
Efficiencies realized in health-care costs would also allow for a one-month health care premium holiday in August, a potential savings of as much as $1,200 for city employees. Another incentive Jones included in his budget: Offering all-access transit passes, which cost $1,400 per year, to city workers for $33 annually. The city manager said that idea stems from an opportunity to give employees a benefit while encouraging transit use, a service the city wants to support and expand.
Property taxes last increased in 2015, also by a penny, to the current rate of 47.87 cents per $100 of valuation. That year, the combination of higher taxes and adjusted fees, including a reduction in homeowner garbage fees, cost the majority of residents between $6 and $20 more combined per year. In 2013, property rates increased 3.17 cents, or 7.25%.