A property tax increase, water and sewer rate increase and a brand new recycling fee: the 2019-2020 Greensboro Recommended Budget of $566 million presented by City Manager David Parrish at the Tuesday, May 21 City Council meeting has it all.
The recommended property tax increase is 3 cents raising the property tax rate to 66.25 cents per $100 of property valuation. The water and sewer rate increase is 4 percent. And if that were not enough there is a brand new recycling fee of $2.50 per month. The recommended budget represents an increase of 4.8 percent or $26 million over the current budget.
The recommended budget also increases the fares on the Greensboro Transit Authority buses from $1.50 to $1.75 for fixed route buses and from $1.50 to $2.00 for the SCAT service.
The manager’s budget message states that this is the first property tax rate increase since 2008, which is technically true, but misleading. The City Council raised the effective rate in 2017 by 2.11 cents. The rate itself did not increase but in 2017 the property in Guilford County was reevaluated which means property values were increased. Keeping the rate “revenue neutral” meaning that the city would have collected the same amount in taxes as it would have if the property values had not been increased would have required the city to lower the tax rate by 2.11 cents. By keeping the rate the same the city collected about $5.7 million more than it would have without the reevaluation.
It was in reality a stealth tax increase. So taxes were effectively raised 2.11 cents in 2017, stayed flat in 2018 and are being raised by 3 cents in 2019.
Parrish explained why the tax increase was necessary and it boils down to the city has been spending more than it has been taking in and using it’s fund balances which is what municipalities call their savings accounts to make up the difference. Parrish said that was not a sustainable model.
Parrish said that in order to keep providing the level of services that the city is currently providing the tax rate had to be increased. Unfortunately for the property owners in Greensboro, the City Council is far more likely to increase the proposed the property tax rate hike than lower it.
Mayor Nancy Vaughan said, “If we want to keep up with the cities that are really moving forward then we have to invest in our city.”
Councilmembers Sharon Hightower and Michelle Kennedy both complained about the increased bus fares. They only need three more votes and bus fares won’t be increased and the revenue to pay for the expanded bus service will have to come from somewhere, which means either something will have to be cut from the budget or the tax rate will have to be increased more than 3 cents.
From a City Council perspective, are any more votes going to be lost by raising the tax rate 4 cents rather than 3 cents? It’s a question councilmembers will be asking in the coming weeks, because this is not a City Council that is willing to reduce spending.
Councilmember Justin Outling noted that the City Council was expanding programs and taking on additional responsibilities in Health and Human services that were not in the purview of municipalities, but were handled by county governments.
After hearing about the proposed tax and fee increases for the citizens of Greensboro the City Council gave itself a raise by increasing their own car allowances. The old rate was $150 a month for all members of Council. The new car allowance will be $300 a month for the mayor $250 a month for the mayor pro tem and $200 a month for the other seven councilmembers.
Outling cast the lone no vote against the increase stating that whether it was called it a car allowance or a salary increase the result was the same. He said it was all part of the total compensation package.
The increase was justified because reportedly some other cities pay more in car allowances for councilmembers than Greensboro.
But here is comparison with another city, some members of the City Council will claim is unfair. The Raleigh city manager recommended having no property tax rate increase this year, keeping the tax rate at 43.82 about 20 cents lower than the current tax rate in Greensboro. According to one set of figures Raleigh is growing about three times faster than Greensboro.
The City Council will start its own budget discussions next week, but nobody knows when because the meetings have not been scheduled.