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No, it's strictly on the revenue side and so inflation has nothing to do with it. It only accounts for an estimate of growth in the tax base occurring in the town during that year.
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The revenue‑neutral property tax rate is the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no reappraisal had occurred. To calculate the revenue‑neutral tax rate, the budget officer shall first determine a rate that would produce revenues equal to those produced for the current fiscal year and then increase the rate by a growth factor equal to the average annual percentage increase in the tax base due to improvements since the last general reappraisal. This growth factor represents the expected percentage increase in the value of the tax base due to improvements during the next fiscal year. The budget officer shall further adjust the rate to account for any annexation, deannexation, merger, or similar event.
Heard on the radio Wake County is proposing a 12% hike in the budget. Revenue neutral my derriere.
Well, many municipalities including Raleigh had bond issues pass (with overwhelming majorities for the most part) over the last few years. Taxes pay for the bonds.
Have not looked at other municipalities, but what I've found particularly notable in Cary is that these massive tax increases are coming even as the proposed budget is actually 3.9% lower than last year's. The operating piece is of course rising significantly with inflation and growth, but the town's capital improvements budget is down 30% from last year's.
Revenue growth in several areas slowed dramatically this year (sales tax, permits and fees) while expenses have come in significantly higher than projected with continued inflation. What was expected to be an essentially break-even budget on the general fund side for 2023–24 is coming in at a $15 million deficit.
With limited levers to pull to make up for this year's deficit and get things in line for next year, and very little natural growth to rely on to help, that's where the big tax increase comes in. Or of course you make big cuts, and Cary believes its citizens would rather pay more than see things cut. For the most part, I don't think they're wrong.
In his blog post this week, the mayor made the case that Cary's taxes will still be very competitive, but the sticker shock is real.
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The proposed tax rate will increase property taxes an average of $649 per year.
Cary has the lowest proposed tax rate [in Wake County] at 32.5 cents followed by Apex at 34 cents, Holly Springs at 34.35 cents, Morrisville at 35 cents, Raleigh at 35.5 cents, Fuquay-Varina at 36.8 cents, Wake Forest at 42 cents, Wendell at 42 cents, Knightdale at 45 cents, Garner at 52 cents, and Zebulon at 54 cents. Wake County will be at 51 cents.
Cary tax rate compares well nationwide to communities like ours: Franklin, Tennessee at 32.6 cents, McKinney, Texas at 42.8 cents, Naperville, Illinois at 66.5 cents, and Scottsdale, Arizona at 51.5 cents.
26.5%...42.6% on the Cary portion and 18.3% on the Wake portion. 0% increase on the $20 recycling fee though!
And the truly insane part is that Cary is proposing $590m of bonds this fall that would by itself raise the rate a total of nearly 30% in three separate increments over the next decade, on top of any other needed increases. I really don't see any way the bond issue passes, at least the $560m one for community projects. $30m one for affordable housing might pass given its much smaller size. If they'd been smart, they would have done the bond issues last year before the massive general increase made everyone's eyes pop out of their sockets.
Last edited by SFspiderman; 07-04-2024 at 09:54 AM..
While my downtown condo went up in valuation, it didn't explode in value like the single family homes in the city/county. As a result, my taxes didn't increase.
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