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Durham city manager proposes $722 million FY26 budget, recommends tax-rate cut above revenue-neutral level
Summary
City Manager presented a $722 million proposed budget for fiscal year 2025–26 that reduces the property tax rate to 43.71¢ (from 59.62¢), funds expanded crisis response, preserves fare-free transit and increases employee pay; council will review in upcoming work sessions and hold a public hearing June 2.
Durham City Manager (presenter) unveiled the city’s proposed fiscal year 2025–26 budget on May 20, proposing a $722,000,000 package that would reduce the property tax rate from 59.62¢ to 43.71¢ per $100 of assessed value and pay for bond and operating costs the manager said the city needs to sustain services.
The proposal reduces the tax rate by 15.91¢ but remains 5.48¢ above the revenue-neutral rate of 38.23¢ calculated after the county-wide revaluation. “I am honored to present my first budget for fiscal year 25–26 as your new city manager,” the city manager said in opening the presentation, and later summarized the topline: “Our proposed fiscal year 25–26 budget is $722,000,000…an increase of about $54,000,000 or 8%.”
The manager’s pitch emphasized four priorities: community safety, employee support, service delivery and infrastructure. Among specific proposals were a daytime expansion of the HEART (crisis response) program with funding for 17 new positions including clinicians and street outreach staff; continued funding for fare-free GoDurham bus service; a modest market-based pay adjustment and maintenance of a minimum livable wage of $21.90/hour for full-time city employees; and capital investments including $315.7 million for water and sewer system upgrades and $537.6 million in the capital improvement plan across more than 70 projects.
The presentation notes that property values rose 71.6% after Durham County’s revaluation, which generates an estimated $47,000,000 in additional property tax revenue. The manager proposed using 2 cents of the rate to pay debt service for the $200 million bond program voters approved in November and said the proposed rate ‘‘allows us to invest in the services and the infrastructure that our community has asked for.’’ He also proposed a water/sewer rate increase averaging $6.33 per month (about 8.5%) beginning July 1 and no change to the stormwater or parking rates.
Council members responded with a mix of praise and requests for follow-up. Councilmember Chelsea Cook congratulated the manager and said the proposal was “pretty close” to what she wanted; Councilmember Nate Baker praised continued fare-free transit funding and said it furthers equity and service reliability; Councilmember Deidreana Freeman urged attention to the tax-billing impacts on seniors and households on fixed incomes and requested suggestions for trimming items during council deliberations.
The manager said staff will brief council in budget work sessions in early May and hold a public hearing on June 2; the full proposed budget is posted at DurhamNC.gov/budget. Council will next review the details at scheduled work sessions before any final vote.
Ending: The manager described the proposal as a “fresh look” at city structure and services after revaluation and said the budget aligns with Durham’s strategic plan and community input. Councilmembers praised the document as a starting point and signaled additional scrutiny at work sessions and the June public hearing. No final budget vote was taken at the May 20 meeting.
