A look at Chapel Hill's budget for the 2023-24 fiscal year, including tax rate hike

Chapel Hill Town Council adopted the budget for the 2023-24 fiscal year on June 7. This year’s budget comes out to about $144 million.

The Council voted to approve the budget 8-1, with council member Adam Searing opposing.

“This year's budget is really front end focused on people, facilities, fleet and all of the things that go into supporting our services,” Chris Blue, the Town's interim town manager, said.

Included in the fiscal year 2023-24 budget are 13 new Town staff positions — an engineer, three firefighters, a planning technician, a commercial plans reviewer, a police crisis counselor, a municipal arborist, a housing maintenance mechanic, a planning project manager, an affordable housing manager and two inspector apprentices.

Blue also said that in the past 10 to 15 years, the recession and the pandemic caused governments to hold off on tax increases and hold the line on the budget firmly. 

“The results of that 13- to 14-year cycle, is an awful lot of deferred maintenance of our Town facilities, deferred acquisition of fleet — like new fire trucks, new police cars, new trash trucks,” he said. 

Blue said this year’s budget is an 11 percent increase from last year's budget, and that much of this increase is funded by a 5 percent increase on the general fund tax rate.

“The price of living continues to go up from year to year — the cost of copy paper, uniforms for your employees, those costs continue to go up,” he said.

Blue said he was thankful to the Town Council for approving the "bold" budget. 

Searing said that he feels this budget is bad for the Town, noting that it contains one of largest property tax increases in the history of Chapel Hill. 

“The problem is that we are spending money on things that are silly,” he said.

The budget dedicates $2.84 million total — the equivalent of 2.9 cents on the tax rate — to support affordable housing projects and initiatives, Sarah Viñas, the director of Affordable Housing and Community Connections for Chapel Hill, said.

Viñas said this is a substantial commitment for a town of Chapel Hill's size. She also said that the Town has allocated over $90 million for affordable housing projects since 2020.

She said that the three main areas of focus in the affordable housing plan are public subsidies, tenants' rights and land use.

“We've identified four key housing challenges that will be addressed through the plans, which are limited housing supply, decreasing homeownership opportunities, declining rental affordability and ongoing displacement pressures,” Viñas said.

She also said that the affordable housing team is developing a new investment strategy to identify more substantial resources for affordable housing going forward.

Mayor Pam Hemminger said, though no one wanted a tax increase, Chapel Hill needed to catch up on some things — such as vehicle maintenance and parks and recreation.  

“We didn't raise taxes all during COVID, but it kind of caught up with us at this point," she said. 

Hemminger said the property tax ends up being around $20 a month for the median income property. She also said people who qualify on lower income brackets can apply for tax relief through the county, after proving home ownership and lower income status.

“The Town itself doesn't have a high tax rate, but when you combine it with Orange County and the school district tax, and our high values of properties, that's what appears to give us one of the highest rates,” she said. 

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