Nags Head manager proposes 22¢ tax rate, flags revaluation, insurance and inflation pressures

Town Manager Andy presented the recommended FY2025–26 budget to the Board of Commissioners on May 7, explaining decisions driven by the county revaluation, shared revenue trends, health insurance changes and inflation.

Andy said the county’s revaluation produced a revenue‑neutral rate of 20.84¢ per $100 assessed value; the recommended town rate is 22¢ per $100, described in the presentation as a 1.13¢ increase over the revenue rate that will generate roughly $566,000 in additional revenue. "We are recommending 22 per $100 assessed value," Andy stated during his budget overview.

He reviewed shared revenue volatility over recent years and noted the town will budget more conservatively for FY2026. Andy also explained that the municipality’s prior health insurance pool (Municipalities Health Benefits Trust) is dissolving; the town intends to join a new local government pool and become a voting member to help manage renewals and costs. Andy attributed part of the budget pressure to an unexpected $440,000 increase in health insurance costs driven by high claims and the pool change.

Capital costs were another stressor: Andy highlighted sharp price increases for vehicles and projects (for example, a sanitation truck cost rising from about $265,000 to $400,000), and said the town will continue to budget capital investment carefully. The recommended general fund is approximately $31 million with decreased grant receipts compared with prior years.

Andy also outlined planned capital projects and grant activity the town is pursuing, including beach nourishment permitting (with a bid planned for the fall), stormwater master planning and multi‑year grant projects totaling millions in potential funding. The board scheduled a budget workshop for May 21 and a public hearing on June 11.