Asheville proposes $256M budget with property tax increase to address revenue shortfalls

Asheville City Council convened on May 13, 2025, to discuss the proposed budget for the upcoming fiscal year, which totals $256 million—a $5.2 million increase from the previous year. This budget reflects a 2.1% rise, with the general fund, the city's primary operating fund, seeing a 1.6% increase of $2.9 million.

A significant concern raised during the meeting was the anticipated decline in property tax revenue, projected to drop by 1% next year, resulting in a loss of approximately $750,000. Additionally, sales tax revenues are expected to decrease by 5%, equating to a $2 million shortfall. These declines are attributed to the lingering economic impacts of Tropical Storm Helene, which has created a financially constrained environment for the city.

In response to these challenges, the council is proposing a property tax rate increase of 3.26 cents per $100 of assessed value. For the average homeowner in Asheville, this would mean an additional $114 annually, or about $9.50 per month. This increase aims to maintain a 15% fund balance and support necessary compensation adjustments for city employees.

The budget also includes a hybrid compensation plan, providing a 3% salary increase for employees earning above the median salary of $58,000, while those below this threshold will receive a flat increase of $1,740. The total cost for these adjustments is estimated at $1.1 million. The fire department is set to receive a similar 3% increase, alongside funding for a new supervisory position to help reduce firefighter work hours.

Despite these adjustments, the budget reflects a cautious approach, with no new city-funded positions or programs being introduced. The council has made $5 million in budget reductions to balance the financial shortfall, including pausing contributions to the housing trust fund and strategic partnership grants.

Looking ahead, the council acknowledged that the use of one-time revenue sources and budget cuts may not be sustainable in future years. As a result, discussions about potential tax increases may continue as the city navigates its financial landscape in the coming years.

The meeting concluded with a focus on the city's capital improvement program, which will utilize various funding sources, including general fund dollars and FEMA assistance, to address infrastructure needs and recovery efforts from the recent storm. The council is committed to ensuring that Asheville's essential services and community projects remain funded despite the financial challenges ahead.