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Durham County budget office recommends 3.5¢ property tax increase as revenues slow
Summary
Budget staff told Durham County commissioners the manager's recommended 2025'26 budget relies on a 3.5'cent property tax rate increase (2.5¢ to the general fund and 1¢ for debt service) to close a roughly $40'million gap driven by slower sales tax, reduced occupancy tax and rising expenses for Durham Public Schools, employee benefits and debt.
Durham County budget staff presented the manager's recommended 2025'26 budget on May 13, recommending a 3.5'cent increase in the property tax rate to close the gap between constrained revenues and rising expenditures.
Budget Director Keith Lane said the county's general fund budget is about $688 million and that total county budgets across funds exceed $1 billion. Lane identified slowed revenue growth in sales tax and occupancy tax, a loss of an "oxy" state tax source that will drop to zero in two years, and sharply rising expenditures for Durham Public Schools (DPS), employee benefits and debt service as the primary drivers of the shortfall.
Lane summarized the numeric tradeoffs the county faces: without a tax rate change staff estimate roughly $15.3 million in new recurring revenue for 2025'26; the manager's proposal adds the…
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