As the managers of the Orange County government, Town of Chapel Hill, and Town of Carrboro each shared their recommendations for the upcoming fiscal years last week, a common theme was how each would fund long-term needs and programs while adjusting to a rise in property values for residents and uncertainty around federal funding.
With the county’s four-year property revaluation in its later stages after seeing a 38% increase in the countywide property tax base, many residents will see an increased tax bill moving forward. But based on the proposals shared, the local governments may not be able to provide much relief from their own taxes. As each government attempts to shield their programs from potential federal funding cuts from President Donald Trump’s administration — while also planning for flatter sales tax revenues and affording their staff market-reflective raises — all three are considering just how far above a revenue-neutral tax rate to go.
During his budget proposal presentation on May 6, County Manager Travis Myren said the staff attempted to minimize the tax burden for residents while maintaining Orange County’s investment into their social services – as those programs are often some of the first to be scaled back, but needed the most, during difficult times.
“We know when the broader economy struggles, demand for county services goes up,” he said. “So, we wanted to be sure to preserve the social safety net services knowing that there may be pressures from other levels of government to reduce investments there.”
County Manager Travis Myren presents his proposed FY26 budget to the Orange County Commissioners on Tuesday, May 6. (Photo via the Orange County government.)
The result, as presented, is an operating budget of nearly $312 million and represents a 6% increase from the current fiscal year. While the revenue-neutral tax rate drops compared to before revaluation, Myren proposed adding 2.95 cents per $100 in property value – 1.94 cents of which would be dedicated to facilities planning for the two school districts and 1.01 toward general operational needs for both the county and schools.
For the public schools, the budget proposal allocates roughly $145.8 million, an uptick of 3% compared to last year but still short of both of their requested continuation budgets. Chapel Hill-Carrboro City Schools would receive $64.7 million, while Orange County Schools gets $46.5 million using the same per pupil amount for each ($5,877).
Myren said in order to cover the rest of the county government’s budget, an estimated $7 million would be pulled from Orange County’s fund balance throughout the year.
View Orange County’s proposed Fiscal Year 2025-26 budget materials here and the Board of County Commissioners’ meeting from May 6 here.
Carrboro’s town staff also revealed their draft budget proposal on Tuesday – and, similarly, said using the fund balance would be necessary to cover some of its expenses and avoid a higher tax rate. Several elected officials voiced concerns about leaving roughly $6 million in the town’s savings by the end of the year, and Town Manager Patrice Toney agreed – saying she would not recommend dipping into the balance after this year. But she added that it’s simply not an option this year without making Carrboro residents’ tax bills “astronomical.”
“Something would have to give if we do not use fund balance this current year,” Toney said, “which would mean no pay increase for staff, a reduction in service levels. We have to dip into that… or we go up further on the tax rate – those are the only two options.”
Carrboro Town Manager Patrice Toney answers a question from the town council during the budget proposal on May 6, 2025. (Photo via the Town of Carrboro.)
With that in mind, Toney recommended a 56.5-cent property tax rate, which would be up 9.7 cents from the town’s adjusted revenue-neutral rate. Carrboro’s total budget would decrease to $62.5 million while still coverning the town’s efforts to improve affordable housing options, maintain transit funding, and provide raises to its staff. Some town council members also requested the manager share funding options to advance planning efforts for an extension of the Bolin Creek Greenway at upcoming work sessions – a topic which garnered significant public comment and discussion from the elected officials Tuesday night.
View Carrboro’s proposed Fiscal Year 2025-26 budget materials here and the Town Council’s meeting from May 6 here.
In Chapel Hill, residents would be paying a property tax rate of 50 cents per $100 of property value if the proposed budget is accepted. Interim Town Manager Mary Jane Nirdlinger said that amount – which is 5.8 cents over the revenue-neutral tax rate – was chosen to build resiliency against federal funding losses into the town’s budget and continue efforts to catch up on a backlog of expenses for its operations. It also will help ween the town from using its fund balance to cover gaps and balance the budget. During her presentation, Nirdlinger described this year as a necessary “turning point” for Chapel Hill’s recent budget approaches.
“To do nothing,” she said, “will weaken our organization at a time when people rely on us for summer camps, affordable housing, and basic services. Staying at the status quo would require cuts beyond those we’ve identified, and further reductions would mean service changes, such as closing a day at the library, reducing or cancelling services and programs, and incurring serious escalating costs into the future.
“With the changes we are recommending this year,” the interim town manager added, “we will not accomplish as much as we might have hoped — but we will be able to hold our ground.”
Interim Town Manager Mary Jane Nirdlinger presents her proposed FY26 budget to the Chapel Hill Town Council on Wednesday, May 7. (Photo via the Town of Chapel Hill.)
The $163.67 million in total expenses would be a 4% increase from the prior fiscal year, with Nirdlinger warning that any amount less would likely require cutting back services, delaying projects or risking Chapel Hill’s staff retention. Many town council members shared their concerns over the difficult position it may leave residents already facing higher tax bills, including Council Member Elizabeth Sharp. Sharp asked the public to directly let their elected officials know “what services they would like to sacrifice if we are not raising their taxes.”
“We are a community with a big heart, and we very much want to actualize our compassion,” she said, “but it costs money. And at the same time, as a business owner, I’m acutely aware that the place that that money comes from is the maintenance of a value asset, which is the functioning Town of Chapel Hill. If we allow that to degrade, we lose the asset that funds all of the actualization of actual compassion.
“As we move forward,” Sharp continued, “I’m more in favor of a higher rate than some of my fellow council members because I think it’s a Band-Aid we have to rip off. That said…if next year, we’re saying, ‘Uh oh, we have to rip off the Band-Aid again,’ I would very much be in favor of the type of audit that would help us understand exactly how efficiently the budget is being spent.”
View Chapel Hill’s proposed Fiscal Year 2025-26 budget materials here and the Town Council’s meeting from May 7 here.
Each of the three local governments will have public hearings where community members can share their views on the budget proposals and their personal priorities. Orange County will holding a public hearing in Chapel Hill on Tuesday, May 13 and in Hillsborough on Thursday, May 29 with several workshops between the two dates. Carrboro’s town council will have its budget public hearing on Tuesday, May 20 and Chapel Hill’s will hold it on Wednesday, May 21.
All will approve their balanced budgets during meetings in June, as is required by state law before the new fiscal year begins — with Carrboro potentially adopting it on either June 3 or June 17, Chapel Hill’s projected for June 11, and Orange County set for approval on June 17.
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Orange County’s Governments Receive Budget Proposals, Grapple With Adding Taxes or Cutting Services Chapelboro.com.
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