The budget featured significant changes from previous proposals and came together quickly — commissioners received the latest proposal the night before Thursday's agenda meeting, with some details still being worked out. The vote had originally been slated for the commissioner's regular meeting on Monday next week; staff noted that voting on Thursday, while contentious for the board's Democrats, was legally appropriate.
The budget marks a relative victory for conservatives who had initially made little progress in lowering the tax rate closer to revenue neutral. Intense public and political pressure on Republican Chair Bill Rivenbark — who had initially supported a 33.9-cent rate alongside the board's two Democrats — appeared to have been successful, leading to a 30.6-cent tax rate. The budget is reduced by $24 million compared to the 33.9-cent version, or $36 million compared to staff's earlier 35-cent tax rate budget.
Democratic commissioners Rob Zapple and Stephanie Walker decried many of the cuts, including ending the county’s $3 million annual affordable housing funding, $1.6 million in support for 'non-county agencies' (essentially, local nonprofits), and around $1 million each in cuts to social workers and pre-K classrooms.
The budget does not include changes to earlier funding proposals for New Hanover County Schools, Cape Fear Community College, or public safety (which mainly goes to the New Hanover County Sheriff's Office). Public safety and education make up roughly half of the county's budget.
The funding plan eschews borrowing for capital outlay (meaning vehicles, equipment, and other one-time purchases over $5,000) but does tap $8.1 million from the county's fund balance. That move required changing county policy to lower the acceptable fund balance level. Zapple and Walker suggested this would risk the county's excellent Moody's and S&P credit ratings; Republican Dane Scalise argued the county's AAA-rating was not at risk, noting that the modified fund balance level is still twice as high as the level recommended by the Local Government Commission (part of the State Treasure's office which provides oversight for county and municipal finances).
Details on major budget reductions
The five-year, $15-million workforce housing program, launched in 2021, was introduced as an alternative to a larger, $50-million housing bond, which was scuttled in 2021 after years of committee work. Earlier this year, the county celebrated the successes of the program, noting it had leveraged over $130 million in private investment into housing. Zapple, who had pushed hard for the five-year program, was particularly outspoken about its value. Republicans, particularly Scalise and LeAnn Pierce, noted that The Endowment — that's the $1.6 billion foundation formed from the sale of New Hanover Regional Medical Center to Novant — has recently put roughly $20 million into affordable housing, with more funding slated for the future.
Throughout the budget cycle, Republican county commissioners had repeatedly voiced their desire to have The Endowment take over funding nonprofits. Prior to the final budget vote, the county sent an application to The Endowment, asking for $1.6 million to fund the grants its Non-County Agency Committee had already approved. Apparently, The Endowment had read the political tea leaves and was prepared for the request, announcing it would provide that $1.6 million to the county on Thursday morning ahead of the budget vote.
"The County’s formal application followed several months of public discussion by County leadership, so the application was anticipated. Once submitted, the timing aligned with fiscal year deadlines, and we moved quickly to prevent any disruption in funding for nonprofit organizations that provide vital community services," an Endowment spokesperson told WHQR.
During the Covid pandemic, the county used federal relief money to expand pre-K funding from six to 12 classrooms. This year, that federal money has expired, and the county had initially planned to use its own money to fund those six classrooms. The cut removes six classrooms, which will impact around 100 children.
The cut to social workers reduces staffing back to the baseline standard set by the state, reducing 11 full-time employees. Walker in particular took issue with the cuts to social workers, noting that she herself had relied on social services in her life.
A final modification, offered by Scalise toward the end of the meeting, scrapped over $2 million in funding for the Northside Co-op to instead fund 911 upgrades. Zapple had advocated for the updates, saying failing to fund them could put residents at risk, but objected to ignoring the food desert the Co-op was intended to address.
Operational cuts
Republicans had repeatedly pushed county staff to look for savings at the operational level — meaning staffing, supplies, and equipment. Many of the county's proposed budgets included 'across-the-board' reductions; Thursday's 30.6-cent tax rate budget included a 5% cut, excluding funding for public school and Sheriff's office employees.
County manager Chris Coudriet noted that most of that — about 75% — would come from people, as employees are the main cost of the county's internal operations.
Democrats, particularly Zapple, objected to "firing" county staff — suggesting it could cast a pall over employee morale. The cuts of nearly $10 million in operational costs include almost 100 positions. About 30 of those are vacancies that won’t be filled, and 70 are active employees who will have to retire or be laid off (or phased out in some other way). This doesn't include four (out of 13) employees who won't be added to the new Northchase library and employees associated with the pre-K classes.
Scalise framed the budget debate as a realignment of the scope and scale of government and defended the cuts as necessary for the county to live within its means. At the end of the meeting, Rivenbark asked whether staff would be 'fired' or 'laid off.' Coudriet said he would consider it a 'reduction in force,' that is, a layoff. The distinction matters, as Rivenbark implied, because dozens of former employees who will likely have to look for new work will likely have to explain why they left the county — 'fired' would suggest misconduct, whereas 'laid off' means the employee was not at fault. In general, employees who are fired (or who choose to leave a job) are not eligible for unemployment.
Other reductions
The budget also contains a host of other cuts, presented by staff to reach the 30.6-cent tax rate:
- $875,000 merit-based raises of 0.5% for 'high performers'
- $965,000 contingency funds
- $250,000 in rent to the Community Justice Center for detectives
- $350,000 for Legal Aid's Second Chance program (which provides assistance for expunction and restoring driver's licenses)
- $318,000 for updated court video equipment
It also cuts roughly $14 million in previously recommended enhancements, along with other "operational savings." Those cuts include:
- $750,000 reduce staffing for the new Northchase library (from 13 to 9 staff)
- $500,000 discretionary budgets
- $266,000 for the county Board of Elections
- $18,000 HHS part-time position that was slated to become full-time
- $110,000 IT engineer
- $25,000 Cape Fear Museum — two part-time to full-time conversions
- $328,000 Parks and Gardens crew leader, 'various projects'
- $35,000 for a passport agent
- $41,000 floodplain software for the planning department
- $35,000 part-time coordinator for Soil and Water
- $548,000 Family Support Specialist program — anti-truancy program cut to partially balance out funding for school nurses, paid from the county’s mental health fund
- $650,000 for public art at Project Grace, Northchase library, and Smith Creek Park's second phase
The budget also includes other operational reductions, which didn't all include costs. That includes cutbacks for subscriptions, supplies (cut by 50%), training and travel (75% reduction), overtime, mileage reimbursement, cell phone allowance, and 'casual part-time' positions. It also cuts NHC's general assistance payments program, which helps low-income residents afford utilities.
Final vote
The three-plus hour meeting was tense and at times outright combative, especially toward the end when the board’s Republicans moved to vote on the budget instead of waiting until Monday’s regular meeting. Zapple voted against several economic development measures where Rivenbark had recused himself, leading to a deadlocked vote that Zapple appeared (erroneously) to believe might forestall the main budget vote. But it went ahead, and passed.
The final budget proposal came together relatively quickly. Coudriet apologized for only being able to deliver it to commissioners the night before the meeting, noting some details were still being worked out. While it’s not clear whether waiting for Monday would have made any functional difference to the final budget priorities, Zapple protested the brisk timeline, calling it wrong and a mistake.
[Disclosure notice: Commissioner Rob Zapple is a member of the WHQR Board of Directors, which has no say in news reporting or editorial decisions.]
