Charlotte City Manager Ron Carlee will present Monday what he calls a “continuing service budget” for the upcoming year that keeps the status quo in city government and has a 2 percent raise pool for employees.
His recommended budget includes a 7.25 percent property tax increase, which would go into effect in July. That tax increase is for an $816.4 million capital plan that includes new roads, sidewalks, affordable housing, six police stations and money for new infrastructure west of Charlotte Douglas International Airport.
The capital budget, which includes spending through 2020, doesn’t include money for a streetcar, an issue that has divided council members for a year. Carlee said he will present a new way to pay for the 2.5-mile streetcar extension later, but he has removed the controversial transit project from the overall capital budget.
“We are looking at alternative financing,” Carlee said about the streetcar. “This has been a dynamic process.”
The streetcar’s separation from the larger capital plan could clear the way for council approval.
Carlee will present the budget Monday night at 7.
For years, Charlotte’s tax base grew rapidly, both from the annexation of outlying areas and the construction of vast new subdivisions and shopping centers. That meant the city only had two property tax increases in 25 years and none since 2006.
But as Charlotte runs out of room to grow, the city is entering what budget director Randy Harrington calls a “new normal.”
Harrington also said the city also still hasn’t fully recovered from the recession that struck Charlotte in the fall of 2008.
“We still aren’t to pre-recession sales tax levels,” Harrington said.
Carlee said the general fund operating budget for the upcoming 2014 fiscal year actually has a nearly 2 percent deficit, due to the loss of $5 million as a result of people successfully appealing their property assessments to Mecklenburg County.
But rather than raising property taxes for the operating budget this year, Carlee has decided to use one-time funds to plug the gap. He said there will probably be a small property tax increase next year to cover the gap.
If the City Council approves the property tax hike this year for the capital budget, and one again in 2014 for the operating budget, that would be two increases in two years.
Carlee’s budget proposal for the coming year would increase the city property tax from 43.7 cents for every $100 of taxable property to 46.87 cents. For the owner of a house valued at $200,000, the owner will pay an additional $5.28 a month, or $63.36 a year. That doesn’t include county property taxes.
The city’s general fund budget – which funds police, fire and transportation – will be $495.2 million for the upcoming fiscal year.
Under the city’s proposal, council members would approve the 3.17-cent property tax increase starting in July. But they wouldn’t ask voters to approve bonds for the capital projects until November 2014. There would be other bond referendums in 2016, 2018 and 2020.
The property tax increase is needed to pay off the bonds. If voters reject the bonds next year, the property tax increase remains, unless council members rescind it.
A majority of council members have said they will approve the tax increase starting in July, even though they are up for re-election in November.
Residents will also see higher water and sewer bills starting in July. The average customer will face a $2.14 hike on his water bill and a 41-cent increase for stormwater projects.
The Charlotte Area Transit System isn’t planning any fare increases for the upcoming year.
Similar to 2013 budget
In the years after the recession, former City Manager Curt Walton was forced to make a number of reductions, including cuts to school crossing guards.
Carlee’s budget has only a few changes from Walton’s previous budget.
One is $2 million for the Foundation for the Carolinas, which plans to start a rental assistance subsidy program for low-income residents.
“For me the budget process starts in 2015,” said Carlee, who started work April 1. “Then I can hear from the community for the first time.”
Capital plan, minus streetcar
The capital plan being considered is the same that Walton designed a year ago, minus the streetcar and a $10 million UNC Charlotte computer science program known as informatics, which was designed to spur jobs.
It includes $44.7 million for road improvements west of the airport; $92.6 million for improvements in east and southeast Charlotte, including $25 million to renovate Bojangles Coliseum; $166 million for infrastructure in northeast Charlotte, much of it along the planned route of the light-rail line; $133 million for public safety and neighborhood improvements, including six new police stations; $169 million devoted to roads, sidewalks and a cross-city pedestrian and bike trail.
The capital program appears to have the support of a council majority and Mayor Anthony Foxx.
It’s unclear how Carlee would pay for the streetcar project, which has the firm backing of Foxx.
One option would be to set aside money that could be spent so long as the city gets a grant from the federal government.
Foxx has been nominated by President Barack Obama to be U.S. transportation secretary, and if confirmed the mayor could influence whether Charlotte could receive federal money for its streetcar.
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