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Wilm. Property Taxes Going Up -- Question is, How Much?

By Megan V. Williams

Wilmington, NC – Wilmington faces a projected 10-million dollar budget shortfall next year, and that has some on City Council considering as much as a seven-cent increase to the property tax rate.

Everyone on council agrees the tax rate must increase by at least four cents: two pennies to cover a mistake in how New Hanover County calculated property tax value last year and another two to implement a recommended pay increase for city staff.

Every penny increase in property tax raises $1.4 million for the city.

But council is divided on whether to cut back on spending projects or increase the property tax rate further to make up the rest of the shortfall. Council members Laura Padgett, Ronald Sparks, and Jason Thompson all said they'd be willing to consider tacking on a few additional cents to cover some spending needs. Members Earl Sheridan, Kristi Tomey, Jim Quinn, and Mayor Bill Saffo objected, urging staff to make up more of the difference with cuts.

"I personally don't think a six to seven cent tax increase is fair to the tax payers," Saffo said, "At the same time, I want to be able to strike a balance and for the taxpayer to understand the dilema that we're in."

City Manager Sterling Cheatham says it will be hard to choose where to pare back what he described as an already lean budget.

We think that most of the services we provide are critical services and you want to support those services. But the council has given us some clear direction and we're trying to figure out how we can comply, Cheatham said after today's day-long budget retreat.

The city already plans to cut in half the amount of money it hands out to local non-profits this year. Cheatham's recommended budget also turns down numerous capital improvement requests, from a half million dollars for the city's bike path system to $138,000 for emergency bridge repairs.

City officials blame slowing sales tax growth for much of the ten million dollar budget shortfall, but say Wilmington is still in better shape than many other cities around the country because foreclosures haven't done much damage to property tax revenues yet.