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Each year, state law requires the Orange County Board of Commissioners to adopt a balanced, annual budget by June 30. The process begins in the spring, when each county department submits to the county manager a budget request for the next fiscal year. The county manager, in consultation with budget and finance staff, reviews the departmental proposals and compiles an overall county budget that is submitted to the Board of Commissioners in early May. The BOCC holds a series of public hearings and budget work sessions to review each proposal and the projected revenues to determine the final county budget.
Most of a county's budget pays for services that are mandated by either the state or federal governments. Below is a list of services that counties must provide for residents as mandated by the state:
Orange County also provides many non-mandated services, such as Parks and Recreation, the Public Library, Solid Waste Management, Public Transportation, Economic Development, etc. The county is not required to offer these kinds of services, but opts to do so to improve the quality of life for the county.
Public Education is a priority for the Orange County Board of Commissioners. The board has a funding target that 48.1 percent of general fund revenues be dedicated to education.The FY19-20 adopted budget exceeds that target at 49.4% of revenues.
North Carolina’s school finance system was created more than eighty years ago. The state is responsible for instructional expenses (including personnel) while county governments pay for capital expenses (buildings and maintenance).
In recent years, state funding for public education has been reduced. According to Public Schools First NC, state government per-pupil spending went from $8,867 per student in 2007-08 ($10,483 in today’s dollars) to $9,528 in 2017-18. Adjusted for today's dollars, that is a decline of $955 per student.
As a result, Orange County's contribution to public schools current expense needs has increased. The 2019-20 budget includes an increase of $187.25 per student. These supplemental funds pay for additional personnel such as teacher's assistants, salary supplements for teachers and school administrators to help the schools attract and retain experienced and qualified teachers, and other needs requested by the schools.
The Public School Forum of North Carolina compiles county expenditure data each year. In 2016-17, the last available year, Orange County ranked No. 1 in the state for local per pupil spending.
Orange County provides supplemental funding to our public school systems to make up for shortfalls in state funding. These supplemental funds pay for additional personnel, salary supplements for teachers and school administrators to help the schools attract and retain experienced and qualified teachers, and other needs requested by the schools.
However, final decisions on how these funds are used by the school systems rest with each Board of Education. The Board of County Commissioners does not dictate how these local funds are prioritized and spent. The county receives funding requests from each school system, reviews those requests and then decides on an amount to provide to the systems. The county does not go through the school's requested budgets and decide which items they will fund. Each Board of Education prioritizes how they will spend the funds from the county.
Orange County raised property taxes only once in the nine years prior to FY 2018-19 (see chart below). The small tax increase (1.27 cents) in FY 2018-19 and the increase in the 2019-20 budget (1.75 cents) are largely related to the bond issues that were approved by voters in November 2016 ($120 million for public schools and $5 million for affordable housing). As more of these funds are released, the county incurs debt service.
An * by a year denotes the county underwent a property revaluation.
The Board of Orange County Commissioners (BOCC) have received several communications asking how the quarter-cent property tax increase dedicated to Climate Change Mitigation will be allocated. The BOCC directed the County Manager as part of their approval process to develop options and a process through which funds will be authorized.
The County Manager has directed staff to develop options over the summer for the Board's review in September. Those options will address the focus of spending, the incorporation of social justice and racial equity goals, the role of various advisory committees, as well as the BOCC’s own approval framework.
The adopted county budget funds many programs to combat poverty in our county, through our Aging, Child Support, Social Services, Housing and Community Development, Partnership to End Homelessness, Criminal Justice Resource, Public Transportation, Human Rights and Relations, and Health Departments as well as nearly $1.5 million in funding to outside agencies, many of whom address poverty.
This year’s budget includes a new Restoration Legal Counsel position that will expand and enhance the efforts already underway by the District Attorney and judicial stakeholders to assist eligible individuals that have driver’s license suspensions based on an inability to pay traffic court debt. In addition, this attorney position will provide legal assistance for residents eligible to seek relief under North Carolina’s expanding expunction statutes. The revocation of driving privileges and a criminal charge, even one that has been dismissed, create significant barriers to employment, education, housing, health care and family stability.
In the 2018-19 fiscal year, the commissioners appropriated $100,000 to create a new local voucher program for affordable housing. The program will be continued in the 2019-20 budget.
The Board of County Commissioners have the statutory responsibility to adopt a balanced budget prior to June 30 of each year. The Local Government Budget and Fiscal Control Act (N.C. General Statutes, Chapter 159, Article 3) governs the budgeting process for counties and cities. The board adopts the budget by setting revenues and expenditures. The county fiscal year runs from July 1 through June 30.
Orange County is continually looking for projects that will bring better jobs to the county as well as increase the commercial property tax base. In recent years, the county has landed investments like the Morinaga plant in Mebane and the Wegmans Market coming to Chapel Hill in 2020. These projects will increase the commercial property tax base and, in the case of Wegmans, will bring in more local sales tax revenues.
Unfortunately, it would take dozens of similar projects to increase the commercial property tax base enough to realize an overall reduction in the property tax rate. The county and towns' commitment to preserving the rural nature of the county through the Rural Buffer and other programs limits how much commercial development can be brought into Orange County.
Orange County welcomes public input into the county budget. Each year the Board of Commissioners hold public hearings to receive feedback from interested parties. For the FY2020 budget process, public hearings will be held May 14 at the Whitted Building in Hillsborough and May 16 at Southern Human Services in Chapel Hill. Residents and taxpayers are given an opportunity to speak about the budget (up to three minutes per person). Each hearing begins at 7 p.m.
In addition, residents and taxpayers may communicate directly with the Board of Commissioners via email or attend any regularly scheduled BOCC meeting and sign-up to speak during the public comment portion (three minute limit also applies). Below is the schedule of work sessions and regular meetings for the FY2020 budget adoption.