(Editor's note: This report has been updated to clarify terms of incremental pay hikes for police officers and firefighters.)
Fayetteville City Manager Douglas Hewett has proposed a budget for the upcoming fiscal year that includes higher costs for residents in the form of property tax and trash fee increases.
The property tax would increase to 56.95 cents per $100 property evaluation, according to the spending plan.
Most of the increase — 4.25 cents — is due to bonds that were passed by Fayetteville voters in November’s election. The tax increase for the $97 million in bonds, which fund public safety, affordable housing and infrastructure, was originally estimated lower at 4 cents per $100 home evaluation. Some on the City Council took issue with that increase during Hewett’s budget presentation.
City officials say the rest of the tax increase, at 2.75 cents per $100 property evaluation, is necessary to offset a decline in its share of sales tax revenue from Cumberland County, something the city was informed about earlier this year.
In previous years, the city received a larger sum of the county’s sales tax revenue. But the county has changed the way it collects and disperses the revenue to municipalities.
“Based on the changes with our sales tax collection methodology and agreement with the county based on the collections agreement and a number of other factors, we are projecting that we're going to not have as much revenue as we had last year,” Assistant City Manager Jeffrey Yates said in an interview.
In total, the proposed tax increase is 7 cents per $100 property evaluation. In other words, the tax rate on a home valued at $200,000 would increase $140 a year or nearly $12 monthly.
There’s also a proposed residential solid waste fee of $265 annually, $40 more than last year’s .
Hewett also has built into the budget $19.8 million from what he calls efficiency. This money comes from expected gaps in employment in certain city jobs. Vacancy rates are higher than usual because workers have more options as the COVID pandemic has subsided.
“I’ve not budgeted $19.8 million,” Hewett told the City Council last week in his budget presentation. “I know based on historic trends that we’re not going to be fully staffed. I’ve already incorporated that savings into this budget that asked for tax rate increases.”
During that meeting with the City Council, Mayor Pro Tem Johnny Dawkins said he was not happy with the budget and the proposed tax and fee increases.
“I don’t support what’s been proposed,” Dawkins said. “We have a lot of work to do.”
Mayor Mitch Colvin was more optimistic. He said he expects Fayetteville’s revenue from sales taxes to grow in the coming years because even though the city’s share from the county is decreasing, the overall sales tax revenue has increased countywide in recent years.
“It’s got to be taken into context. We’ve almost doubled sales taxes since five years ago, and it’ll continue to do that,” Colvin said. “We're going to make this gap up.”
A public hearing is scheduled on the proposed budget during the City Council’s regular meeting at 7 p.m. Monday at City Hall.
Residents can sign up to speak online, by phone at 910-433-1312 or by email at pamelamegill@fayettevillenc.gov.
Other measures in budget
Beyond the proposed tax and fee increases, there are provisions in the proposed budget to increase pay for city employees.
This includes a raise of 4% for city staff as well as an increase in the incremental raises police officers and firefighters receive through the salary range based on their years of experience in each department.
These are incremental increases that existed long before this budget proposal. Those raises, under the budget proposal, would go up by 25%. This does not constitute a 25% increase in total pay but only to the incremental raises based on experience.
There’s also a proposal to increase the city’s 401k contribution for employees by 1%.
Ben Sessoms covers Fayetteville and education for CityView. He can be reached at bsessoms@cityviewnc.com.
