Council opens public hearing on FY26 budget; manager, staff and residents debate tax rate and fund balance use

The Indian Trail Town Council opened a public hearing on the proposed fiscal year 2025–26 budget and discussed the recommended tax rate and capital priorities at the meeting.

Town Manager Michael McLaurin said the manager initially recommended an 18.5-cent rate, but council members agreed on a 17-cent rate as a compromise after reviewing priorities. "That is the benchmark. That is the North Star that we are currently following," McLaurin said. The council set a public hearing and scheduled final budget adoption for the council’s first meeting in June to allow staff to close fiscal-year '25 actuals and finalize FY26 numbers.

Finance staff and members of the public questioned assumptions in the proposed budget. Resident Dan Schellingkamp asked why the budget’s ad valorem revenue projection appeared low compared with his calculation using the town’s assessed value and a cited 96% collection rate; he said his math suggested roughly $15.1 million in ad valorem receipts at 17 cents while the budget listed about $13.9 million. Finance staff noted that different line items such as motor vehicle taxes and conservative collection-rate assumptions can create differences and that the town models conservatively because using fund balance to sustain operations can draw scrutiny from the Local Government Commission and auditors.

A number of residents and council members discussed fund balance and fiscal prudence. Council members said the town maintains a high credit rating, has used fund balance for capital paving and other projects in prior years, and that slowing sales tax growth and anticipated contract increases (for example, solid waste) warrant a cautious approach. Resident Lynn Cole voiced support for council’s decision to preserve the town’s credit rating and the staff’s recommendation: "I hate paying taxes as much as anybody, and I would love to have my taxes be a lot less... but I'm a realist in terms of understanding that we need to have money to run the town."

Staff told the council it used a conservative 96% collection rate in the budget model to avoid overreliance on optimistic revenue assumptions and to preserve reserve policy thresholds; staff also said FY25 actuals were still being finalized and that FY25 used about $600,000 of fund balance appropriation to balance the previous year’s budget.

Councilmembers emphasized competing priorities — public safety, transportation, infrastructure, economic development and capital projects such as a public works facility and a potential community center — and asked staff to prepare a longer-term capital plan. The manager recommended revisiting the capital list in summer work sessions to refine timing and funding strategies.

Ending: Council kept the public hearing open and will vote to adopt the FY26 budget at its first June meeting; staff will supply clarified revenue math and any FY25 actuals needed to finalize projections.