“Viewpoints” is a place on Chapelboro where local people are encouraged to share their unique perspectives on issues affecting our community. All thoughts, ideas, opinions and expressions in this series are those of the author, and do not reflect the work, reporting or approval of 97.9 The Hill and Chapelboro.com. If you’d like to contribute a column on an issue you’re concerned about, interesting happenings around town, reflections on local life — or anything else — send a submission to [email protected].
A Fiscal Wake-Up Call
A perspective from Ian D. Scott, Vice President for Advocacy, The Chamber for a Greater Chapel Hill-Carrboro
Orange County residents recently received their 2025 property revaluation notices—and many are still recovering from the shock. County-wide property values increased by 52%, and some residential properties doubled in value.
While rising home values grow household wealth, they also bring a larger expense. Combined with high property tax rates, increasing property values can cause a major affordability challenge for many homeowners. At the proposed tax rates for next year, the owner of the median-valued home in Chapel Hill will pay more than $7,900 in combined property taxes. That’s more than double the property taxes paid by the median-valued homeowner in Raleigh ($3,780) and more than triple what the median Burlington homeowner pays ($2,318). In fact, Chapel Hill, Carrboro and Hillsborough homeowners pay the highest total property bills in North Carolina.
But let’s be clear: the real issue isn’t the revaluation. It’s not even the tax rates exactly, though those are quite high. The critical challenge we face is that our local governments are on an unsustainable fiscal path
The Fiscal Sustainability Problem
For their upcoming fiscal years, every local government in Orange County is proposing a tax increase above the adjusted revenue-neutral rate, AND they plan to dip into reserves to cover operations. In FY2025–26, Orange County plans to spend over $7 million from its fund balance, while Chapel Hill and Carrboro plan to draw down $1 million and $3.8 million, respectively. Like an individual’s savings account, these fund balances are accumulated by cities and counties in the good years to cover potential shortfalls or unexpected expenses.
This year is a perfect budget storm which places the real issues in stark relief. Our communities have higher property values and homeowners have higher tax bills, yet local governments must still tap reserves to fill budget gaps. This is not healthy, and it can’t continue for long.
Luckily, there is another way. To get on a sustainable fiscal footing, we need to broaden and deepen the tax base that funds local governments and schools. In short, we need to grow.
The Growth Conundrum
For decades, local governments in Orange County enacted policies that restricted growth. The rural buffer, adopted in 1988, and the water/sewer service boundary, adopted in 2001, are two of the most high-profile examples. Local zoning and land use codes are also full of policies that limit development. Our communities’ project approval processes have also tilted the table against growth. Until recently, building nearly anything in Chapel Hill—except for a detached single-family home—required conditional zoning or a special use permit, which meant multiple public hearings and votes by the full Town Council.
Only investors determined to locate projects in Chapel Hill, Carrboro, or Orange County persisted long enough to clear those policy and process hurdles. Many found a less risky, more welcoming investment climate in another jurisdiction—and they didn’t have to look far. Alamance, Chatham, Durham, and Wake Counties have all attracted more investment and faster population growth than Orange County over the past 30 years.
Some long-time residents will reply, “Well obviously! Slower growth and fewer people were the goals. Our policy choices worked.” To an extent, they did—except slower growth and fewer people in Orange County didn’t change the trajectory of growth in the Triangle region.
Our community is located in the heart of one of the country’s most economically vibrant and fast-growing regions. Restricting growth locally has simply accelerated development in neighboring communities, and we still feel the consequences of our neighbors’ growth—like more traffic congestion, more environmental impacts, and more housing pressure.
The Case of Our Schools
Still not convinced our default posture on growth is a problem? Chapel Hill-Carrboro City Schools is an unfortunate canary in the coal mine for our community.
For decades, the district has held top marks in the state on a wide range of student performance metrics and has been home to some of the most desirable public schools in the country. But now CHCCS is seeing enrollment fall, has depleted its financial reserves, and is having to cut staff to manage a declining budget. The problem: too few young families can find, let alone afford, a home in the district due in large part to our restrictive growth policies.
A Wake-Up Call
The schools’ case study is a harbinger of the challenges that will soon face our local governments. From arts to parks, transit to housing, libraries to senior care—our local governments have expanded services, built new facilities, and recruited exceptional staff to implement best-in-class programs. But our highfunctioning local governments are very expensive to operate, and inflation is making them even more costly. On top of rising costs, local governments in the coming years should not expect much support from state and federal governments.
We simply cannot afford the exceptional libraries, parks, and transit local citizens expect without reliable revenue growth. Just like local schools, financial reality will soon force tough choices on local governments.
Solutions
At the most basic level, there are only three possible solutions to our fiscal challenge: cut services, increase taxes even more, or increase the number of people and properties paying those taxes. In the short run, we will almost certainly have to stomach paying higher taxes and trim expenses on budget lines we’d prefer to increase. But over the long run, the best way to keep this community special and maintain fiscal sustainability is to welcome more folks to join us.
We need more taxpayers generally, and more high-value taxable commercial properties specifically. To get those, we need to attract more investment by adopting new policies and reforming project approval processes.
There is good news on the local policy and regulation front. Chapel Hill is currently undertaking a serious effort to rewrite its Land Use Management Ordinance (LUMO) in ways that will help generate the kinds of development envisioned in the Town’s Complete Community Strategy. They also opened access to water and sewer service along Hwy 15-501 south of Southern Village, and the current budget situation would be far worse without the tax revenues generated by recent investments downtown and in the Blue Hill district. Carrboro, too, is drafting a plan to stimulate investment and add housing downtown, and has kicked off an overhaul of their development code. These changes are essential to shift our reputation among investors.
Local government leaders have recognized the trends, developed plans to alter course, and are working hard to implement the necessary policy changes. We should praise their efforts, encourage faster implementation, and reelect officials committed to a smart growth future. But to sustain our progress and ensure a sustainable fiscal path, every local resident needs to reexamine their attitude about growth.
Attitude Shift
Rethinking our attitude about growth means embracing the Triangle’s inherent strengths to grow and diversify our local economy. It means applauding more development, at larger scales and higher densities. It means welcoming new neighbors living closer in all types of housing. We must continually remind ourselves that smart growth is the way to build a tax base that can carry the weight of our ambitions without breaking the banks of our residents.
While it took decades to arrive in this situation, we can’t afford patience with the solutions. Time is of the essence. A project approved today will improve fiscal fortunes in 3 or 4 years. We are already spending our savings, and the longer we wait for change, the more likely we will have to make deep service cuts while paying higher tax bills.
Our communities’ reaction to the 2025 revaluation is a wake-up call to reassess our attitude about growth, and we can’t afford to hit the snooze button.
“Viewpoints” on Chapelboro is a recurring series of community-submitted opinion columns. All thoughts, ideas, opinions and expressions in this series are those of the author, and do not reflect the work or reporting of 97.9 The Hill and Chapelboro.com.
Viewpoints: A Fiscal Wake-Up Call Chapelboro.com.
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