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Wake County staff outline FY27 budget, proposing 2¢ tax increase and $35M one‑time fund‑balance use
Summary
Staff presented the FY27 recommended budget (~$2.3B), proposing a 2¢ property tax increase and about $35M in one‑time fund‑balance use to offset revenue shortfalls; commissioners pressed staff on long‑term sustainability, impacts to schools and public safety, and legislative uncertainties including a pending Blue Ridge loophole fix.
Michelle, a county budget staffer, presented the Wake County manager’s recommended FY27 budget at a May 21 work session, saying the plan is roughly $2.3 billion and reflects rising costs including an $11 million increase in health‑insurance expenses.
To close a projected gap staff proposed a two‑cent increase in the property‑tax rate combined with roughly $35 million in one‑time fund‑balance use. Michelle said anticipated new revenue fell by about $8 million this year (versus a typical $40–50 million) primarily because of valuation appeals and a legislative issue staff described as the 'Blue Ridge loophole.' She added that staff model shows reserves combined with the debt fund are roughly $650 million and that current metrics keep the county above credit‑rating guardrails, but she warned repeatedly drawing on fund balance is not sustainable.
Commissioners asked for context about scale and impacts. Staff said the general fund alone is about $500 million; Todd (finance staff) added the combined reserve/debt metric used for credit assessments was above the county’s 30% guardrail at the end of the last fiscal year. Commissioners asked staff to present specific choices that would follow if the board chose not to adopt the 2¢ increase — for example, reducing school allocations, canceling planned EMS positions or scaling back program investments — and staff said they could produce options for the board by the May 27 deadline.
The board also discussed revenue uncertainty from commercial valuation appeals and pending state action to close the Blue Ridge loophole; staff said the House had passed a fix and that hope existed for Senate action, but the outcome remained uncertain and would affect FY27 revenue projections.
Several commissioners expressed reluctance to raise taxes while noting the practical tradeoffs: one said failures to raise revenue could mean “draconian cuts” to schools, libraries and public safety; another asked staff to specify what services or positions would be at risk if the rate were held flat. The manager told commissioners staff would continue transparent discussions with the school system and bring back analyses so the board can meet the June 1 adoption date.
No formal vote on the budget occurred at the work session; staff said they would deliver requested follow‑up materials by May 27 so the board can vote on the FY27 ordinances on June 1.
