Politics & Government

City budget plan looks to small businesses for extra revenue

Charlotte city budget negotiations

Kim Eagle discusses Tuesday's budget proposal.
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Kim Eagle discusses Tuesday's budget proposal.

Charlotte City Council reached a budget compromise Tuesday that would raise the property tax rate by a penny and would require about 2,100 small businesses to pay a new $250 a year garbage fee.

The businesses affected use the 96-gallon rollout containers instead of using large dumpsters. Those businesses currently pay property taxes but don’t pay a special garbage fee.

Under the new plan, their taxes would increase, and they also would have the new $250 fee that would generate about $580,000 for the city.

To offset the tax increase, council members approved reducing the garbage fee paid by single-family homes from $47 to $25. The garbage fee for apartments would increase from $24 per unit to $25 per unit.

The city said that about 70 percent of single-family homes would pay less under the proposal. Homes valued at more than $225,000 would pay more under the council’s proposal.

A person whose home is worth $300,000 would pay about $18 more a year in additional taxes and fees. However, the city will likely increase water rates and stormwater rates, meaning that homeowner’s total bill could be higher.

The city has struggled to close a nearly $22 million budget shortfall that was caused in part by the General Assembly’s repeal of the business privilege license tax.

City Manager Ron Carlee has proposed a property tax increase to ensure that commercial properties – which benefited from the license tax repeal – would help close the budget gap.

The proposal was created by council members Greg Phipps and Vi Lyles. The plan was approved 8-2 at Tuesday’s meeting.

Republicans Kenny Smith and Ed Driggs wanted to increase garbage fees for homeowners and apartments and have no tax increase. Their proposal failed.

The garbage issue may be settled for the coming fiscal year, which begins in July. But council members said they will study how to best pay for garbage collection in the future.

If council members approve the reduction in garbage fees for the upcoming year, they could vote to increase those fees again next year. The city could also start a “Pay as You Throw” program, which would charge homeowners based on how much trash they produce.

The one remaining issue in this year’s budget is whether to fund a new fire department ladder company and 18 new firefighters for the Northlake Mall area. That would cost $2.7 million for the upcoming year.

Council members want to increase fire protection, but they don’t know how to pay for it. City Manager Ron Carlee said paying for the ladder company would likely require either higher taxes or higher fees.

Council member Claire Fallon lobbied for the city to pay for the ladder company from streetcar money. That failed.

“Our first priority should be police, fire and infrastructure,” she said. “This budget is not police, fire and infrastructure.”

Here are some of the other parts of the budget proposal:

▪ There are raises for city employees. The raise pool for non-public safety employees would be 1.5 percent.

▪ The city’s financial partners, including the Arts and Science Council, won’t see their funding reduced. The ASC had asked for more money.

▪ A proposal to cap each council member’s travel expenses at $5,000 for each member failed. A council discretionary fund was cut by $100,000.

▪ Council members agreed to have a smaller increase in five fees that developers are often required to pay. The fees are for services such as rezonings.

The base fee for a major commercial subdivision development is $3,740. The city had proposed increasing it to $8,110. Under the proposal approved Tuesday, the increase would be to $6,490.

The Real Estate and Building Industry Coalition sent a letter to Charlotte City Council, Carlee and other top staff with a message Tuesday: If you want to charge us more, give us better service.

REBIC, which represents commercial, multifamily and single-family developers, said the proposed increases will make it more expensive to develop in Charlotte than in other cities. Staff writer Ely Portillo contributed to this report.

Harrison: 704-358-5160

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