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FY15-16 Recommended Budget

Monday, May 4, 2015 I presented a recommended budget for fiscal year 2015 and 2016 (FY 15-16) to the New Hanover County Board of Commissioners. If you did not get a chance to see the presentation live you can always watch it “on demand” via the county’s webpage:

It was not an easy ask and not something I did without great care and concern, but I did recommend to the board to raise the county’s property tax rate by 5 cents, which would bring the county’s overall property tax to 60.5 cents per $100 of value effective July 1, 2015. If the board accepts my recommendation, the additional 5 cents would cost the taxpayer on the value of a $250,000 home in New Hanover County $125 more next year.

A few other illustrations:

  • The average sale price of a home today is $238,000 so that would cost that taxpayer $119 more;
  • the median sales price of $190,000 would cost that taxpayer $95 more;
  • the median value of an owner-occupied home of $215,000 would cost the owner $108 more.

The obvious and fair question: Why are you recommending a 5 cent tax increase? Simply stated, I don’t see another sustainable alternative to meeting the county’s ongoing obligations. A quick or deep dive into the budget will demonstrate the overall increase in next year’s budget is below the rate of growth in the economy – I’m proposing a budget for FY 15-16 that spends only 1.3 percent more next year than the current year, and this is after the recommendation to increase funding for public education by an average of 7 percent. We accomplish the total, limited growth of the proposed budget by reducing spending on a range of other fronts to include cuts in the Cape Fear Museum (a county owned asset), the public library system, parks and gardens, public health, social services, and others.

If the board accepts my recommendation to adjust the property tax rate, I can assure each of you the new dollars raised will only be used to pay for voter-approved debt obligations, and specifically, voter-approved debts from 2006 and 2008. It’s been a while ago, but in 2006, 67 percent of those voting approved an $18 million county park bond for mostly improved parks facilities in the unincorporated county, and in 2008, 62 percent of those voting approved a $164 million community college bond for new facilities downtown and on the north campus near the I-140 by pass. For the fiscal year that beings July 1, 2015, the county will be paying fully on the principal and interest for the $182 million approved by the voters. That equals $15,030,000 in debt payments next year, and the 5 cent tax increase will raise the revenue ($15 million) to pay that debt obligation.

The recommended budget does not ask only for additional revenue; in fact, it recommends a reduction in the fire service district tax for those who live in the unincorporated county, and it recommends for the second consecutive year a reduction in the tip fee for disposal of solid waste at the county’s landfill. Specifically for those who receive their fire protection from the New Hanover County Fire District, I’m recommending a fire service tax of 7 cents per $100 of value; currently you pay 7.9 cents. For all of us, the cost to dispose of solid waste next year, if my recommendation is accepted, is $52 per ton versus the current tip fee of $55 per ton.

The entire proposed budget that I recommended to the board for FY 15-16 is $350 million. That includes the general fund, the fire fund, the solid waste fund, the room occupancy tax fund, and others. The associated property tax increase is specific to the general fund, which is recommended at $306.6 million next year.

I hope you’ll take the time to read the budget materials in detail. You can visit the Budget page on our website to see all the materials the board is using to make its decision about the spending plan it ultimately adopts for next year. The best summary, in my opinion, is the budget message addressed to the board and dated April 30, 2015. This can be found in the Recommended Budget book. It’ll outline the proposal for paying debt, doubling down on economic development, enhancing public education, and funding a robust system of public safety.

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