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Chatham County staff present FY2026 recommended budget, propose 60¢ property tax rate and larger debt reserve contribution
Summary
County staff presented a recommended FY2026 general fund budget that relies on a 60¢ per $100 property tax rate, reflects the recent revaluation, increases a debt-reserve transfer and uses restricted utility fund balances tied to a pending merger with Tri River.
Chatham County staff presented a recommended fiscal 2026 general fund budget that would use a 60 cents per $100 valuation property tax rate, increase the county's contribution to its debt reserve and incorporate restricted utility fund balances linked to a utility merger.
The recommended general fund total shown in the presentation was $211,800,231. Budget staff described the recommended property tax rate as 60¢ per $100 of value, which the presentation said is lower than the current-year rate but above the county's calculated revenue-neutral rate. Staff said the budget includes a contribution to a debt reserve equal to about 8.5 cents per $100 of value to help fund planned debt-funded projects in the coming years.
Why it matters: County staff told commissioners the budget aims to balance revenue pressures from slower single-family residential construction and real estate transaction activity with long-term debt obligations for school and county capital projects. The plan preserves reserves for future debt while proposing a tax-rate level that staff said will be higher than the revenue-neutral rate but lower than the fiscal 2025 rate.
Staff framed the recommendations as precautionary: the presentation assumed minimal sales-tax growth for FY26 and included a correction to reflect the county's plan to move certain utility debt payments into the general fund while the utilities enterprise fund is closed out after the Tri River merger. The finance staff described that move as net-zero over the multi-year period but an operating impact in FY26 because restricted utility revenues will be used to meet a non-callable debt payment.
Budget staff outlined several revenue assumptions behind the recommendation: building permit and inspection revenues were forecast to increase modestly based on pending multifamily permits; registered-deeds excise tax revenue was budgeted more cautiously because of recent high-value, one-off transactions; occupancy tax was projected to rise after a hotel opened midyear; and Medicaid-related charges to users were expected to fall as more residents enrolled in Medicaid. Sales-tax projections were described as only slightly below estimated year-end collections and assumed minimal growth for FY26 to protect against downside risk.
Staff emphasized timing and next steps: commissioners were told the recommended budget will be brought back as a draft ordinance for the board's June 16 meeting and that staff will return with scenarios showing the effects of different tax-rate choices and continuation-only budgets that separate routine, inflation-driven costs from new expansions. Commissioners asked staff to prepare a continuation-only comparison that isolates the cost of doing business versus expansion requests.
Ending: Staff said the recommended budget is intended as the starting point for deliberation; the board can propose changes between the presention and the June 16 ordinance vote. The presentation also noted formal deadlines tied to adopting an FY26 budget by July 1.
