Wilmington, New Hanover leaders eye proposed budgets: Here are 5 things you need to know
The end of budget season is in sight for Wilmington and New Hanover leaders now reviewing staff-recommended spending proposals.
Budgeting is a process that last months for local municipalities and weighing what gets funded and how it's paid for can be contentious.
New Hanover County Manager Chris Coudriet recently told the board of commissioners that he likens the presentation of a draft budget to Christmas Eve -- and the passing of the county budget to Christmas.
All municipalities in North Carolina must adopt their budgets, per state statute, by July 1 -- the beginning of the fiscal year.
More: A $7 million question: Why Wilmington is scrambling to boost city salaries
Both Cape Fear municipalities are set to adopt their budgets in June. New Hanover County's Board of Commissioners is set to vote on a final budget between June 6 and June 20 while Wilmington will take a final vote on its spending plan on June 21.
A public hearing on New Hanover County's budget will be held on June 6. Wilmington held a public hearing on their proposed budget on Tuesday night.
A growing pot of money
The amount of money funding the operations of New Hanover County and the city of Wilmington are climbing. Property and sales tax make up the largest chunk of the budget for both municipalities and are the funding sources New Hanover staff structure the budget around, Coudriet told the Board.
New Hanover County is expected to collect $222.3 million in sales tax from its $48.8 billion tax base. That's close to a 2% climb in the county's property tax collection. The county also expects to collect $104 million from sales taxes in the next fiscal year -- an increase of 6.5% from last year.
Wilmington expects to collect more than $70 million in property taxes -- more than the $66.8 million it projected collecting during the current fiscal year. The city also projects a $37.6 million collection in sales tax. During the last fiscal year, Wilmington expected to collect roughly $32.5 million.
Despite the climb of sales tax collection in recent years, Coudriet told the Board of Commissioners not to be too skeptical.
“There is nothing to suggest what we are seeing and experiencing is soft or one-off,” he said. “The economy is growing globally, but I think, more importantly, Wilmington (and) New Hanover County really has firmly established itself as the economic hub of Southeastern North Carolina.”
Tax cuts for some while rates rise for others
Those living inside of Wilmington's city limits could be paying higher property taxes this year. A proposed budget would tax Wilmington residents 39.5 cents per $100 of valuation -- a 3.73% increase from the current tax rate of 38.08 cents per $100 of valuation.
The tax hike is tied to wage increases for city employees, especially raises for entry-level positions and for police and firefighters, and is expected to generate more than $3 million next year.
Businesses in Wilmington's municipal services district are also set to see a one cent increase in their tax rate as it rises from 5.47 to 6.47 cents.
But throughout New Hanover County, residents will be paying less in property taxes next year. Board Chair Julia Olson-Boseman has been a vocal advocate throughout the budgeting process for a tax decrease.
Last year, New Hanover's budget put the tax rate at five cents above revenue neutral, which meant tax increases and an outcry from some residents.
The budget drafted for next year would drop the tax rate by two cents to 45.5 cents per $100 of valuation. That's projected to lower the county's property tax collection by $10 million, and that money has to be made up somewhere.
Hospital money goes to work
For the first time, New Hanover County plans to use money from a $300 million bucket created by last year's sale of New Hanover Regional Medical Center to Novant Health.
Money from the hospital sale went into a $1.25 billion community endowment, $300 million revenue stabilization fund and a $50 million mental and behavioral health fund.
New Hanover staff have proposed using $4.9 million from the revenue stabilization fund, along with $2.4 million in interest, to make up for the revenue lost to the tax cut.
Growing staff and wages
The number of employees working for New Hanover County and the city of Wilmington is on the rise. In the last year, New Hanover added 84 new employees. Wilmington's workforce has grown by 31 since last year, but the city is having trouble filling some positions.
That's why the city has proposed investing $7.3 million in employee wages and adjusting their pay scale citywide. New Hanover County has also invested in employee wages, especially for the county's first responders, including those working for the sheriff's office, fire rescue and in 911 communications.
Investing in the capital
The city of Wilmington is looking to sink more than $19 million into street rehabilitation and repair -- making it the capital improvement getting the most money from the city. The city will also invest more than $7 million in public facilities and more than $4 million in stormwater improvements.
For New Hanover County, capital improvement projects given funding in the recommended budget include money for the North Chase Library, relocating the 911 communications department into a new center, and pickleball courts for Arrowhead Park, among other projects.
Rising stipends for some city leaders
Pay for members of the Wilmington City Council is set to increase next year by 25%. The raise comes during the second year of a three-year program aimed to bring pay up to the average benchmark across North Carolina cities.
Mayor Bill Saffo's pay will rise from $19,035 to $23,794 next fiscal year while pay for other council members will increase from $14,490 to $18,113.
Reporter Emma Dill can be reached at 910-343-2096 or edill@gannett.com.
This article originally appeared on Wilmington StarNews: What to know about government budgets in New Hanover, Wilmington
