Voicing a desire to better fund its public school systems while managing funding losses for other areas of government operations, the Orange County Board of Commissioners is poised to further raise taxes in its final budget for the upcoming fiscal year.
During the board’s budget amendment work session on Thursday, the county commissioners gave tentative approval to a budget plan for the upcoming fiscal year, which includes raising the property tax rate by 4.22 cents and an added $1.935 million to the budget proposal brought by county staff. The commissioners — who passed 17 amendments to the operational budget and 11 amendments to the Capital Improvements Plan — approved the changes with a 6-1 vote. Commissioner Earl McKee cast the dissenting vote.
Amid difficult economic circumstances for residents and local governments alike, the county leaders frequently discusses how they were forced to weigh many hard choices during the amendment process and fiscal year preparation.
“This is representative democracy in all its messiness,” Jean Hamilton, the chair of the Board of County Commissioners, said Thursday at the start of a meeting which ultimately ran four hours before commissioners agreed on a final plan.
“These amendments reflect the perfect-storm conditions we find ourselves in,” she added. “We have less federal and state funding, especially in public education, higher prices of homes after COVID, (and) rising costs for healthcare, fuel, everything.”
The Board of Orange County Commissioners deliberates in its work session over budget amendments for Fiscal Year 2026-27. (Photo via the Orange County livestream.)
Compounding those external pressures is the so-called “Blue Ridge Loophole,” an unintended consequence from a recent North Carolina Supreme Court decision that enables apartment developers across the state to avoid paying property taxes through nominal partnerships with affordable-housing nonprofits. Not only does Orange County lose out on that revenue, but it also has significant expenditures from capital investment projects already approved — like renovations for the Animal Services Center and Link Governmental Center, and millions of dollars for the school districts’ construction bond.
As a result, county manager Travis Myren’s original budget proposal included a 3.75-cent property tax increase, even while coming several million dollars short of the budget requests from Orange County’s two public school districts. Supporters of the schools urged county commissioners to add more funding — but doing so would mean an even bigger tax increase.
“This has been messy, this has been hard,” Hamilton said. “You (either) raise taxes or you cut (funding), or the schools will be adversely affected.”
Another big budgeting issue involved the Chapel Hill Public Library, as Myren’s original plan would have eliminated county funding for the library over the next two years. Supporters of the library have turned out in force to urge commissioners to restore that funding since the draft budget was unveiled, including on Thursday night. But the board ultimately decided to prioritize public education instead.
“It’s a real tradeoff, (and) it’s a very painful tradeoff,” said Orange County Commissioner Marilyn Carter, “because of all those very impassioned letters and phone calls and emails and people coming to the dais and talking about what a difference the library makes in their life. It made a difference in my life as a child…
“But if I have to make a priority decision,” Carter concluded, “freeing up some of that money so we can put it back into the schools…that’s where I’m leaning.”
While county commissioners did not restore the funding for the Chapel Hill library, they did agree to slow down the phaseout. If adopted as agreed upon Thursday, the county will draw down funding for the library over the next three years rather than two, giving the institution and the town government more time to adjust.
The Chapel Hill library wasn’t the only entity seeing less funding than it hoped. Other key provisions of the budget include a $150,000 cut in funding for the Orange County Visitors Bureau and a 2% raise for county staff, less than the current inflation rate. An amendment to increase that pay raise to 2.5% narrowly failed because it would also have required another tax hike.
For the schools systems, though, commissioners settled in a 4-3 vote to raise the property tax by .47 cents, aiming to cover a 4.5% overall increase in per-pupil spending across both school districts. The measure — which came after a proposal to add a .81-cent increase failed to garner enough votes — brought the largest addition to the county’s total estimated budget, which now sits at $327,066,083.
McKee voted against both the proposed property tax increase and the tentative budget plan, but not because he does not support the issues. He stated multiple times during Thursday’s work session he was concerned over a 4-cent raise on taxes because of the burden it could put onto homeowners, especially for those living in rural fire districts that are facing a significant increase in fire district taxes. The addition made for more school funding to the property tax rate put him over the self-imposed 4-cent threshold.
“That’s my conundrum,” McKee told to the rest of the board during the school funding discussion. “As I’ve mentioned before… you know, I have a streak of hypocrisy. But it only extends so far.”
The Orange County Board of Commissioners will take a final budget vote on Tuesday, June 16. The full list of budget amendments from work session from Thursday, June 4, can be found on the county government’s website.
Brighton McConnell contributed to this report.
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