May 6. By Dave Vieser and Dave Yochum. Last year at this time, Cornelius commissioners were expecting a proposed budget which would reduce the town tax rate, even while raising more money. The reason: The county-wide revaluation resulted in significantly higher values, meaning a lower tax rate would still raise more revenue.

That’s precisely what happened, and the town rate from the 2024 adopted budget is the current town tax rate: 17.31 cents per hundred dollars of assessed valuation. For a home assessed at $500,000, that amounts to an annual town tax of approximately $865.

It’s looking more and more like the local tax rate for Fiscal Year 2025, which begins July 1, will remain flat at 17.31 cents. Local taxes represent about one third of a taxpayers bill, with the remainder being Mecklenburg County taxes.

Indeed, we have the lowest tax rate in the county.

Despite higher expenses—a projected 10 percent increase in combined operating and personnel expenditures compared to FY24 budget, the draft 2025 fiscal year budget calls for a level tax rate—same as this year.

The draft 2025 budget, which will be presented at tonight’s Town Board meeting, shows expenditures of $42 million.

Transitioning the fire department

Chief Guerry Barbee

One of the major expense areas is the fire department, which continues to transition from a part-time/volunteer model to full-time—more in keeping with an $11.5 billion (assessed value) town. By the way, Cornelius has grown from the 52nd largest municipality in North Carolina in 2000, to the 31st largest in 2020.

With schools, hotels, businesses and homes from modest to mansion-size, a full-time fire department is high on the list of citizen priorities.

The total Fire Dept. spend in the FY24 budget under operating/personnel is $3.35 million. Next year proposed: $4.31 million.

Capital spending would go from $313,700 during the current fiscal year, to $824,000 next year, according to Chief Guerry Barbee.

Fund sources

Comparing the FY24 budget to the draft FY25 budget, property tax revenue increases $769,782, primarily due to natural growth, i.e., additions on to homes, a newly constructed buildings on a previously vacant lot, tear-downs.

The town will tap into more funds to balance the budget with transfers from the General Fund to capital project funds, including:

• Transferring $1.2 million of State Grant Funds that the Town has received into the Bailey Road Park Tennis & Pickleball Capital Project Fund for constructing six tennis courts and 10 pickleball courts.

• $1 million of state-supplanted funds into the Smithville Infrastructure Fund for improving the town-maintained roads, sidewalks, and stormwater in Smithville.

• $2 million of state-supplanted funds into a capital project fund intended for our match towards our NCDOT partnership projects.

Cutting expenses

Town Manager Andrew Grant says expense reductions always occur throughout each budget process. The town manager reduces and refines departmental requests prior to the February Budget Planning Session, the March Budget Workshop and in subsequent drafts of the new budget.

Grant

This year, reductions and refinements occurred in almost every department, including reducing the number of originally proposed staff vehicles to be purchased and funding some new positions at a half-year instead of the originally proposed full year whereby funding starts January 1 instead of July 1.

There were no cuts in road construction—another priority according to citizen surveys.

Fund balance = Savings account

For next year’s draft budget, there is a total and un-reconciled use of fund balance of $5.61 million. After reconciliation of $5.66 million of one-time expenditures funded by restricted & dedicated funding sources, there is a net contribution to fund balance of $49,000 in the draft budget.

If the budget goes through with no tax hike it means the owners of a house assessed at $250,000 would pay $432.50 in local taxes. Owners of a $1 million home would pay $1,730.

If that rate increases by a penny, the owner of the $500,000 home would pay $50 more per year in local taxes.would rise by about $50 annually if the tax rate was increased by a penny. A half penny would hike the taxes by about $25.

What happens next?

The draft budget will be formally presented Monday May 6, at the Town Board Meeting, and will be available on the town’s website www.Cornelius.org starting the next day. Public hearings will also be held on Monday May 20 and Monday June 3. The local budget must be adopted no later than June 30 and will go into effect July 1, 2024. Tax bills with the new rates will go out in August.

Town commissioners seem to be in agreement around no tax hike.

Bottom line

If the County maintains its tax rate of 47.31 cents per $100 in property value, the owner of a $500,000 home in Cornelius would pay a total of $3,231 a year in property taxes—if the proposed local budget is adopted.

Quotable

“I remain pleased that we are presenting a balanced budget to our citizens.  Dipping into our fund balance for operating expenses would not be healthy or sustainable for our town,” said Mayor Woody Washam.

This is the 11th budget the mayor has worked on; seven as mayor and four as a member of the Town Board.