Tue June 10, 2014
Charlotte's $2.1 Billion Budget, Made Possible Through Big Sales Tax Collections
The Charlotte City Council on Monday night adopted a budget that increases the city’s spending about 7 percent without raising property taxes.
When the city council started discussing the $2.1 billion budget, council member Claire Fallon could hardly wait to make this point.
"Make note, there’s no tax raise," she said. "It stayed steady."
"There is no increase in the property tax rate, that is correct," Mayor Dan Clodfelter added.
City council raised the property tax rate last year roughly 7 percent. This time, no change.
But council member Kenny Smith said the budget nickel and dimes taxpayers in other ways.
"Even when government doesn’t raise taxes, it is good and very proficient at raising fees," Smith said. "This will be the fifth straight year we’ve raised water, sewer and storm water rates."
This year’s increase will mean the typical water, sewer and storm water bill will go up about $2 a month.
Mayor Pro Tem Michael Barnes said the council recognizes people are tired of those fees going up.
"But we also are having to deal with the growth that’s occurred in Charlotte and Mecklenburg County over the last several years, and part of that is extending that infrastructure," he said.
Barnes called it a good investment.
Council member Ed Driggs said the city is being too aggressive with its spending, especially since the state legislature is repealing a business privilege tax cities collect. That tax will expire around this time next year.
"The General Assembly has committed to find new revenue sources for municipalities," Driggs noted. "However, we have the certainty of a cut in our funding against the uncertainty of a commitment to try to find replacement revenue."
That revenue amounts to about 3.5 percent of the city’s operating budget, according to city staff.
Driggs and Smith were the only council members in attendance who voted against the budget. Many who voted for it echoed this point by council member Al Austin:
"Charlotte is a growing city with growing needs," Austin said. "We have developed a budget with no tax increase, and I think we need to feel proud of that."
But Mayor Clodfelter, a self-proclaimed "finance geek," offered this perspective:
"We were able to come into balance without a property tax increase because, in large part, we had a very robust growth in our sales tax collections this year," he said. "I think, Mr. Manager, if I remember the number right, it was in excess of 8 percent annually."
Clodfelter said the city can’t rely on that kind of growth. He said if the economy flattens out next year, or if the General Assembly doesn’t help cities replace that business tax revenue, those will be major challenges for next year’s budget.
Additional budget info:
- Police officers and firefighters will get a 1.5 percent raise plus a step increase of 2.5 percent to 5 percent based on where they are in their careers.
- All other city departments have a 3 percent merit pool for raises. That means department directors can award raises based on employee performance and comparison of salaries to the market.
- Above & Beyond Students and the YWCA have their funding restored to earlier levels.
- The Bojangles' Coliseum area gets $25 million that city council originally approved last year to repurpose the area to support amateur sports. There had been discussions of much more money for Bojangles' Coliseum and Time Warner Cable Arena, but the city has not reached a decision on those proposals.