Orange County commissioners agree to intent-to-adopt 2025–26 budget; lower near-term tax increase by phasing school PAYGO

Orange County commissioners on Thursday approved a package of capital and operating budget amendments and passed a resolution of intent to adopt the county’s FY 2025–26 budget and year‑1 of the capital investment plan, setting the county ad valorem tax rate at $0.6383 per $100 of assessed value.

The board said it changed the school capital PAYGO phasing plan to reduce the immediate tax-rate impact. Commissioners approved a staff‑sponsored alternative (called “Framework 2”) that phases PAYGO for school capital at $500,000 in year 1, $6,000,000 in year 2 and $10,000,000 in year 3, decreasing the manager’s originally proposed tax increase by roughly 1.79 cents. Commissioners said that change brings the county rate much closer to the revenue‑neutral rate for the current revaluation cycle.

Why it matters: The board said the phased approach eases a sharp tax burden created this year by property revaluation and rising costs, particularly for residents on fixed incomes. Commissioners emphasized the change trims this year’s tax impact while leaving the bond referendum voters approved last year intact.

Most important votes - The PAYGO/school capital amendment passed 6–1 after extended debate about impacts on school construction plans and equity between the county’s two school systems. Commissioner discussion centered on balancing short‑term homeowner relief against long‑term school facility needs. Commissioner Earl framed the change as narrowing the gap between the manager’s recommended rate (65.59¢) and the revenue‑neutral rate (62.64¢), noting the amendment would set the board’s proposed rate near 63.8¢ and reduce a typical Orange County homeowner’s bill (example used by commissioners: a house revalued to $400,000) by roughly $71 compared with the manager’s recommendation.

Other approved changes and context - The board approved a broad set of capital investment plan (CIP) amendments proposed by staff and by individual commissioners. Staff amendments included correcting project scopes and funding sources; commissioners’ amendments adjusted scopes, deferred some out‑year projects and reallocated funds in ways meant to protect short‑term cash flow and the county’s debt profile.

- Several individual CIP items were altered or deferred after discussion: scope reductions for the animal services renovation (saving $298,720), deferring Millhouse Park and portions of the Millhouse property out of the 10‑year CIP pending a full work session, removal of solar photovoltaic work at a leased Hillsborough property, and deferral of some park projects while retaining a proposed new county gym. Commissioners also approved a motion to halve planned conservation easement funding in later years in light of a state matching grant.

- The board preserved investments the chair called “safety and health” priorities, including EMS substations and a proposed 911 scribe/center buildout, and advanced moving the justice space‑needs planning (Link Building renovation) into earlier CIP years to enable Sheriff’s Office relocation and to reduce the initial evidence‑building footprint.

Operating amendments and other actions - The board restored funding to reinstate a crisis‑response clinician position dispatched from the 911 center to support the county’s CARE (Crisis Assistance, Response and Engagement) pilot; that amendment passed unanimously. Commissioners said the position helps dispatchers de‑escalate behavioral health calls and can reduce unnecessary law enforcement responses.

- The board approved a half‑year elections coordinator position for January onward to boost capacity ahead of the 2026 election cycle; that measure passed unanimously.

- The board voted to increase the Long‑Term Homeowners Assistance program by $100,000 and to fund the addition from the Social Justice Reserve; that amendment passed.

- The board amended Article 46 (the county’s local sales tax allocation) by directing staff to reduce $44,379 from Article 46 balances; the motion as adopted removed a specific reference to incentive payments so the reduction can be applied from available Article 46 balances at the manager’s discretion.

Votes at a glance (selected outcomes) - Staff CIP amendments: approved (voice vote recorded as unanimous) - CIP B01 (animal services scope reduction, −$298,720): approved (motion carried) - CIP B02A (Bedford amendment): withdrawn by sponsor - CIP B02/B03 and multiple small park/equipment adjustments (savings or deferrals e.g., soccer goals at Fairview $30,000; deferred Millhouse Park and Soccer.com Phase 2): approved (most recorded 7–0) - CIP B06 (Southern Human Services scope reduced to health‑department improvements only): approved 7–0 - Conservation easements and Lands Legacy funding: substitute motion to cut planned future funding roughly in half (to preserve matching grant strategy) — approved - Framework 2 (school PAYGO phasing; reduces near‑term county tax increase by ~1.79¢): approved 6–1 - Article 46 reduction of $44,379 (language amended to general Article 46 reduction rather than naming incentives): approved - Reinstatement of CARE 911 crisis clinician (partial year cost ~ $97,111; net county cost under $1 on a $400,000 home’s tax bill): approved 7–0 - Half‑year Elections coordinator (start Jan 2026): approved 7–0 - Intent‑to‑adopt resolution (sets final rates and staff/benefit decisions for the Tuesday, June 17 adoption hearing): adopted by the board; voice vote recorded as unanimous.

Key numbers and clarifications from the meeting - County ad valorem tax rate set in the intent resolution: $0.6383 per $100 assessed value (63.83¢) - Chapel Hill‑Carrboro City Schools special district tax in the resolution: 14.79¢ per $100 assessed value - Manager‑recommended tax rate cited in discussion: 65.59¢; revenue‑neutral rate cited: 62.64¢ - Example household impact cited in debate: on a home revalued to $400,000 the PAYGO amendment would reduce Orange County taxes by about $71 compared with the manager’s recommendation (this example was used by commissioners as an illustration). - Conservation easement funding: board approved cutting the scheduled future spending roughly in half to account for a state matching grant and to preserve longer‑term, steady funding.

What the board will do next - Commissioners said staff will finalize the “intent‑to‑adopt” resolution and present it for formal adoption at the June 17 board meeting. The resolution as drafted also incorporates employee pay decisions discussed at the work session (a 2% wage increase for permanent employees effective 07/01/2025, a living wage recognition of $18.18/hour, and continuation of retirement and benefit plans), plus the capital funding allocations as amended.

Limitations and items for follow up - Several CIP items were deferred to full work sessions (for example, Millhouse Park and the Rogers Road community center / RENA topics) so commissioners can consult with affected communities and review updated cost estimates. - Commissioners directed staff to recheck Article 46 balances and to identify which project accounts can be reallocated should Article 46 funds be used to cover any shortfalls.

Ending note: The board framed the package as a balancing act — trimming near‑term tax impacts raised by revaluation while preserving capital priorities and voter‑approved bond projects. Final adoption is scheduled for June 17, when the board will vote the formal budget ordinance and tax rates into effect.