Charlotte City Manager Marcus Jones has proposed a budget for the coming fiscal year that invests in significant pay raises for city employees and prevents older, low-rent apartments from being bulldozed.
Somehow, it does all that without requiring a tax increase. Well, at least no tax rate increase. A lot of people in Charlotte will still be paying more in taxes as new property valuations go into effect.
The budget is not final. The City Council has the right to request changes and still has to formally vote to approve it. But it’s a baseline that will remain largely intact, and several council members said the proposal effectively covers their priorities.
Here’s what you need to know about it.
Where does the money come from and where does it go?
The city of Charlotte’s overall budget is right around $2.6 billion. A large portion of that, however, is spoken for before the City Council gets a look at it. The city operates Charlotte Douglas International Airport, and it brings in its own revenue to pay for operations. Same goes for Charlotte Water.
What the City Council generally looks at is called the “General Fund,” which is funded by tax dollars and gets spent on all the services that come to mind when you think city government: police, fire, trash, housing, etc.
Where the money comes from in the 2020 proposed budget
Where the money goes in the 2020 proposed budget
What are the highlights of the budget?
Every budget contains a laundry list of new investments and initiatives. Here are the most important ones in the proposed 2020 budget.
- 3% pay increase for most employees
- A minimum $2,080 raise for city employees with a positive performance review.
- $16/hour minimum wage for city workers. This is higher than the current $15/hour minimum wage.
- 5% raise for police sergeants and a 5% raise to the top-tier pay for police officers.
- $7 million to preserve “naturally occurring affordable housing,” which refers to older apartments where rents are low but aren’t part of the city’s housing program. This money would be used to help renovate them and entice owners not to sell for redevelopment.
- $1.5 million to the aging in place program, which helps low-income people afford to pay property tax increases.
- $54.4 million to complete the parts of the Cross Charlotte Trail that have already been designed. This would not include the northernmost section of the trail.
How is Charlotte doing all these new things without raising taxes?
Basically, Jones says they’ve found the money for all these things through savings in other areas of the budget. Primarily, these savings have come from capital projects the city has planned in years past.
The city found tens of millions of dollars through going through all Charlotte’s ongoing projects to find where money could be cut, what was no longer needed, and where money could be redirected. The city also plans to refinance some of its debt at lower interest rates.
Does “no tax increase” mean my tax bill will be the same?
Not necessarily. City government gets the largest chunk of its money through property taxes, which are charged based on how much a person’s property is worth. This year, Charlotte charges just under 49 cents for every $100 a property is worth. So on a $250,000 house, homeowners paid $1,221.75 in city taxes this past year.
Every eight years, Mecklenburg County goes around and puts a new price tag on everybody’s property. This is one of those tax revaluation years, and the economy has boomed since the last time this happened. That means most properties are now worth considerably more than they were being taxed on.
Technically, this proposed budget has a lower tax rate — 34.81 cents per $100 valuation. This is called the “revenue neutral” rate, or what the city needed to lower the tax rate to in order to bring in the same amount of money as the year before.
So on a $250,000 house, the tax bill would now be $870.25. But that $250,000 house probably isn’t worth $250,000 anymore. If it’s now worth $300,000, the total tax bill is $1,044.30, a slight decrease in taxes. If it’s now worth $500,000, the city tax bill is $1,740.50 — a significant increase.
Because different parts of town gained value by different degrees, this means that some people’s tax bills will be higher than others. Areas in green below will likely have a lower tax bill under the proposal. Orange and red areas will have higher tax bills.
What happens next?
This proposal touches off a six-week sprint to formally approving a budget. The City Council will hold a public hearing on May 13 before putting forward any adjustments on May 23.
The final vote is scheduled for June 10.