City Council approves 4-cent property tax increase, down from proposed 7-cent hike

City taxes will rise by 4 cents per $100 property evaluation next year, a rate that is 3 cents less than first proposed in the fiscal 2024 budget.

The Fayetteville City Council approved the new budget in a meeting Wednesday at City Hall.

The solid waste fee will increase $3.33 monthly, going from $225 to $265 annually, according to the budget.

City Manager Douglas Hewett had faced criticism from the public and from some council members after first proposing the 7-cent increase.

Mayor Mitch Colvin said Wednesday that city officials had acted “to ensure the financial well-being of our city and its residents” in approving a budget with the lower tax hike.

“Together, City Council worked tirelessly together to allocate the resources to keep our city moving forward,” Colvin said in a city news release. “The approved budget includes most importantly only the voter-approved tax increase, in addition to cost-of-living adjustments for our police, firefighters and all city employees and contours investment in city services.”

Colvin cited the Cumberland County Board of Commissioners’ decision to change from a per capita to an ad valorem method of tax revenue distribution beginning in fiscal 2026 and the interlocal tax agreement covering the next two fiscal years. That will result in a loss of revenue for the city and other municipalities in the county.

“This is all in the face of county tax formula changes which took millions from Cumberland County municipalities,” Colvin said in the news release.

The recommended budget was presented to the City Council by Hewett on June 1, and a series of budget meetings followed.

“I’m impressed with the amount of care and consideration that our elected officials put forth when analyzing the budget as it is presented,” Hewett said in the news release. “They listen to the residents and take every necessary action to ensure we provide the services everyone in this wonderful city need. Today, council adopted a responsible budget that advances goals and priorities.”

The tax rate included in the budget ordinance is 0.5395 per $100 of assessed value, or an increase of 4 cents. The original recommended tax rate was 0.5695 per $100 assessed value, or a 7-cent increase, the news release said.

In other provisions of the budget:

• Funding for capital improvements for Cape Fear Regional Theatre will double to $500,000. The original request from CFRT was for $2.5 million to fund improvements and renovations. The City Council will be asked to approve a resolution committing $2.5 million to the project at a rate of $500,000 annually for five years.
• The motor vehicle license tax will increase from $10 to $30. The revenue is dedicated to maintaining, repairing, constructing, widening, and improving public streets, the release said. The revenue will support the $25 million in infrastructure bond debt service also approved in the referendum.
• The city will redirect $850,000 in federal American Rescue Plan Act funding from infrastructure improvements to provide $600,000 in operating funds for the city’s Day Resource Center for two years; $150,000 for the Phoenix Center for two years; and $100,000 for the development of an environmental sustainability plan.
• As part of the 2022 bond debt approved in a referendum, the authorization of $12 million of housing bonds will be held until the City Council appropriates those funds. The city has until the fall of 2029 to issue the debt, the release said.
• General fund interest earnings are projected to increase by $1 million based on the investment market and the city’s portfolio performance.
• Funding of $350,000 was approved for the Glennville Lake Walking Trail design.
• The transfer from the general fund to the transit fund will be reduced from $8.46 million to $8.22 million, which is an increase of $3.66 million over 2023.
• An increase of $63,000 was provided for the Fayetteville Cumberland Economic Development Corp.

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Editor Bobby Parker can be reached at editor@cityviewnc.com.