Everyone has been hearing a whole lot about federal cuts over the last year and a half – and, while that may seem to be a Washington DC concern, it turns out that those cuts are having a big effect on what Guilford County taxpayers are being asked to pay Guilford County government this time around.
Guilford County Manager Victor Isler’s proposed fiscal 2026- 2027 budget contains a warning that local taxpayers are increasingly being asked to pick up the tab for costs once carried by the federal government. It also points out that the state government can’t be relied on to help – and that’s adding fuel to the fire.
And the fiscal 2026-2027 budget fire is looking pretty bad for area taxpayers.
While Isler’s proposed budget emphasizes an 11.15-cent reduction in the county’s property tax rate following revaluation, the document repeatedly points to growing financial pressure from Washington and Raleigh as a major concern – particularly when it comes to public education and federally mandated safety-net programs.
The manager’s proposed General Fund budget – which will form the central core of the county commissioners’ final budget to be adopted next month – totals $935.5 million. That’s an increase of more than 10 percent over the current fiscal year. The recommended property tax rate is 61.9 cents per $100 in assessed valuation, down from 73.05 cents following countywide property revaluation.
However, the budget also notes that the proposed tax rate remains 8.64 cents above the county’s estimated revenue-neutral rate. So, while a reduction in the tax rate, may sound pleasing, the truth is that if the manager’s lower tax rate budget, or anything like it, is adopted, taxpayers are going to see some very large tax bill increases in a very bad economy.
Throughout his budget message to the Guilford County commissioners earlier this month – and throughout the budget document itself – Isler continually notes that the county is increasingly being forced to absorb costs tied to federal reimbursement cuts, unfunded mandates and gaps in state funding.
One of the clearest examples involves Food and Nutrition Services administration – a program that used to be known as food stamps. Cuts in that program at the federal level are having a real impact at the county level.
According to the proposed budget, federal reimbursement for administering Food and Nutrition Services has been reduced from 50 percent to 25 percent – creating what county leaders call a $3.1 million annual unfunded mandate revenue loss.
And at the same time, county officials say that new federal requirements are increasing workload demands.
The budget states that recent federal policy changes now require recertifications for certain safety-net services every six months instead of once a year, increasing administrative burdens without additional federal funding.
The budget message states: “Additionally, the federal government reduced the reimbursement rate for Food and Nutrition Services from 50 percent to 25 percent, resulting in a $3.1 million unfunded mandate revenue loss for Guilford County.”
The budget also notes that, despite the loss of federal funding, the county is still adding positions that are tied to federally and state-mandated human services work because the responsibilities remain in place but the financial help from above is drying up.
So, it’s a double whammy in that regard.
Isler’s recommended budget adds nine new positions to those services and continues funding for eight existing positions tied to adult protective services, guardianship, elder justice programs and Medicaid and Food and Nutrition Services administration.
Those services play a major role in Guilford County in particular and the budget emphasizes the scale of the county’s safety-net responsibilities. For one thing, more than 30 percent of Guilford County residents receive Medicaid and/or Food and Nutrition Assistance. According to the budget materials, over 185,000 residents are served through Medicaid administration and that Guilford County EMS responds to more than 80,000 calls annually.
Among North Carolina’s seven most populous counties, Guilford County has the third-highest poverty rate at 15 percent, according to the numbers in the new budget. (It also notes that approximately 65 percent of Guilford County Schools are Title I schools.)
At the same time, county officials argue that the state hasn’t adequately funded public education needs – leaving counties increasingly responsible for filling gaps.
Isler’s budget message states that counties across North Carolina “have unfortunately had to fill in the gap” created by state funding limitations and budget stalls.
And education spending dominates much of the proposed budget. The manager’s budget suggests an additional $25 million in school operating support along with $33.5 million in debt service support connected to massive school bond debt and capital improvement needs.
Combined, the budget states that school-related increases account for 5.5 cents – or 64 percent – of the amount above revenue neutral in the proposed tax rate.
The proposed budget also discusses long-term concerns surrounding future school debt obligations.
Guilford County is preparing planned bond issuances of $565 million in fiscal year 2027-2028 and another $565 million in fiscal year 2030-2031 tied to voter-approved school construction bonds.
The budget also highlights another politically sensitive issue: teacher supplements. It states that Guilford County currently ranks fifth statewide in principal supplements and third in assistant principal supplements, but only 23rd in teacher supplements.
However, the proposed budget doesn’t include funding for teacher supplement increases.
Of course, the county commissioners may add that in. The board has been very, very generous with the school system lately and one of the things they have always enjoyed doing is have the manager come in low on school funding issues and then come in like the cavalry and add more money to the school system before a final budget is adopted so that they look like the good guys. The current nine-member board includes a school teacher, a teaching assistant, two former school board members and a chairman who is so in love with school funding the two should get a room.
But there’s another twist: county officials are now openly tying future teacher supplement discussions to the proposed 2026 quarter-cent sales tax referendum.
The budget argues repeatedly that Guilford County lacks alternative revenue sources that many peer counties already rely on. It notes that Guilford County is currently the only one of North Carolina’s largest counties without a voter-approved revenue diversification strategy like additional sales taxes or prepared food taxes.
County leaders have tried time and time again to get voters to approve a sales tax hike and, about three years ago, they began talking about the possibility of a prepared food tax as well.
The county’s budget officials estimate that the proposed quarter-cent sales tax – which will be on the ballot again this November – could eventually generate about $29 million annually.
Throughout the budget, Isler frames the referendum as a way to reduce future reliance on property taxes.
It’s not just a lack of love from the federal and state governments that’s putting the hurt on, there are a whole lot of other stressors as well.
The county manager also warns that rising costs and inflation are affecting county government itself.
The budget cites:
- Rising jail medical costs
- Higher utility and fuel expenses
- Increased foster care costs
- Growing juvenile detention expenses
- Retirement contribution increases mandated by the state
- Technology replacement costs
- Additional pressure on emergency services and homelessness programs.
One of the more striking figures in the entire budget involves foster care.
According to county budget stats, foster care room-and-board costs have increased from $8 million to $18 million over the past five budget cycles.
The budget states that Guilford County currently has more than 750 children in foster care.
Meanwhile, the county says it’s trying to protect its AAA bond rating and maintain long-term financial stability.
In several places, Isler’s budget argues that Guilford County is attempting to strike a balance between maintaining services and limiting tax burdens during a period of economic uncertainty. It repeatedly references inflation, rising housing costs and financial stress on residents.
Still, one overall message of the proposed budget is hard to miss: County officials believe Guilford County and other local governments are increasingly being asked to shoulder responsibilities and costs that were once more heavily supported by federal and state governments.
