The recommended budget includes a $46 million increase in spending — more than half of that is going to the capital improvement program, including bridges, multiuse trails, and paths. City Manager Becky Hawke said Wilmington has seen slower growth than expected due to national economic pressures. Revenue growth was slower because of limited sales tax increases, an unexpectedly high number of property tax appeals, and a slightly slower rate of new development.
Hawke noted that the proposed significant tax increase runs counter to previous city policy.
"The city has taken a very conservative approach to trying to remain as close to revenue neutral as possible, as valuations of property within the city have, quite frankly, skyrocketed in the last number of years,” she said.
In other words, as properties become more valuable, each cent of tax rate generates more revenue for the city. In the past, after the revaluations done by the county every four years, the city had lowered tax rates to keep the actual tax bill that residents paid as close to level as possible. Hawke noted that as property values had gone up, the tax rate had dropped from 49.84 cents per $100, to 38 cents, to the current rate of 28.25 cents.
"As we look at everything that we are now feeling like we need to bring forward to propose for FY27, we're looking to demonstrate that there is a lot of capacity in the tax base to be able to afford the tax rate that we are proposing," Hawke said.
About 1 cent of the proposed 5.75-cent increase would account for increased health care costs. That’s more or less built in, unless the city pushes those costs onto employees. But another major increase is Hawke’s plan to implement a living wage across the board.
Hawke would set a $45,000 salary floor for all employees at the city. Currently 329 employees make less than that; ome are starting at $26,150 for jobs like housekeeping, recreation, and recycling and trash collection. Hawke suggested the increase could help press other employers to increase their starting wages, among other benefits.
"It helps us maintain equity, competitiveness, and affordability as regional costs of living change over time, but it also provides a number of business benefits," she said. "It helps us increase retention and reduce recruitment costs.”
Along with that salary floor, police and fire would see $10,000 increases to their starting wages. Wilmington's current starting salary for a firefighter is $48,368, which is well below Leland at $54,600 and just below New Hanover County. The proposed increase would put Wilmington at the top of the pay scale compared to regional competitors. Police are in a similar boat — the starting salary would go from $52,154 to $62,593.
Councilmember Cassidy Santaguida asked about the impact of this kind of strategy on retention. Hawke implemented this kind of aggressive pay strategy with a previous employer, which she said was transformative.
"We remained fully staffed with no voluntary resignation for about 18 months," she said, a counterpoint to nearly 40 vacancies in the police department in Wilmington. Hawke argues that the competitive pay would substantially reduce training and recruitment costs and prevent burnout.
Santaguida asked about implementing the pay raises with a phased approach, and Hawke said she would bring that concept to Council’s budget work session on May 15.
Councilmember Kevin Spears similarly voiced some concern about the jump in the tax bill. "Those of us who live in the city, we understand that we pay double and we don't like it," he said, referencing the county tax bill. "And so this is this, I'm not gonna say it's misleading, but it's just it's not the whole picture."
New Hanover County is still in the budget negotiation process, considering two plans, one including a two-cent tax increase and one leaving last year's tax rate untouched. However, Republicans, who hold a 3-2 majority on the Board of Commissioners, have indicated they do not favor a tax increase.
A few other highlights from the city manager's recommended budget include new gear and positions to support first responders, including PFAS-free turnout gear for firefighters, increased funding for WAVE transit, and transportation mobility funding for the Vision Zero, funded by $20 of the vehicle tax to the tune of $1.8M. That Vision Zero plan includes infrastructure aimed at saving lives — with traffic calming devices, better lighting, and pedestrian connectivity. The city has recently hired a new Vision Zero transportation engineer with that aim in mind.
Council has two budget workshops scheduled on May 15 and May 29. There's a public hearing scheduled at the May 19 City Council meeting, and the budget, which requires two readings, is set for adoption June 2 and June 16.
