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Despite property tax rate decrease some Chatham property owners to pay more in taxes

Posted Tuesday, June 16, 2009

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Pittsboro, NC - At its meeting on June 15, the Chatham County Board of Commissioners adopted a 2009-10 general fund budget of $80.5 million, a 3% overall reduction from the current budget, and lowered the tax rate from 65.3 cents to 60.22 cents per $100 valuation. If debt payments are excluded, the general fund budget is actually down 7%.

Despite the overall reductions in expenses, the new budget allows all school facility projects to proceed on schedule and maintains funding for school current expense and teacher salary supplements at the same levels.

In fact, the school budget increased 4% from FY 2009 and the budget’s share of funding for K-12 schools increased from 36.5% to 39%.

Each property owner will be affected differently, depending on how much his or her real property values changed

The county administration predicts that the county’s tax rate is likely to be lower than the average tax rate of surrounding counties.

According to Renee Paschal, assistant county manager, a revenue neutral tax rate does not mean that all property owners’ tax bills for 2009 will be about the same as their 2008 property tax bills. "Each property owner will be affected differently, depending on how much his or her real property values changed, whether the new values were adjusted through the appeals process and how the new tax rate impacts their vehicle and personal property tax bills."

Despite lower revenues overall, the county continues to maintain a strong fund balance, which will allow it to deal more effectively with unforeseen circumstances such as further deterioration of the economy.

Paschal said that it was particularly challenging to make additional budget cuts because the share of the county’s budget required to fund mandated services increased from 70% to 73%.

For the current fiscal year, the expected revenue shortfall is expected to be approximately $500,000, which also is impacting revenues projections for next year, Paschal said. Examples of revenues severely impacted during the new budget year include: sales taxes, down 31%; permits and fees, down 27%; and excise taxes for the Register of Deeds, down 30%.

After the presentation of the county manager’s recommended budget, commissioners faced a $650,000 revenue gap. Property tax appeals were greater than expected and the state lowered its forecast of expected sales tax receipts by 3%. In addition to making these cuts in the recommended budget, commissioners trimmed an additional $80,000 to reduce the tax rate from 60.32 to 60.22.

The major budget items that commissioners trimmed from the county manager’s proposed budget include:

Reduced funds for bus route linking Pittsboro to Chapel Hill by $87,000;

Reduced funds transferred to reserve for debt service payments by $125,190;

Reduced funds for contingency by $50,000;

Reduced funds transferred to parks capital reserve by $22,266;

Reduced county funds for transportation planner from $59,634 to $18,634 by utilizing federal stimulus funds; and

Identified additional revenue sources to reduce the impact on property taxes, including $40,000 in Alcohol & Beverage Control proceeds and a $200,000 transfer from the personnel savings account.

 
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