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County manager recommends 2‑cent hike as FY27 revenues fall far short of requests
Summary
Durham County staff told commissioners a sharp drop in new revenue for FY27 leaves roughly $57–58 million in unmet requests; Manager Hager recommended a 2‑cent property tax rate increase to preserve fiscal stability, fund DPS increases and add EMS capacity while limiting use of fund balance.
Durham County Manager Hager presented the county’s recommended FY27 budget to commissioners, saying the county faces a materially weaker revenue outlook than recent years and that the manager recommends a modest tax‑rate increase to protect core services.
“We started out the year with roughly 50 plus million dollars in expenditure needs, wants, requests,” a presentation lead said, summarizing department requests that included $28 million from Durham Public Schools. Staff told the board that budget‑to‑budget new general‑fund property tax growth is only $391,000 and sales‑tax growth attributable to the general fund is $771,000 — small amounts in a roughly $700 million general‑fund budget.
Manager Hager said the recommended package prioritizes fiscal stability and targeted support. “The manager’s priorities understanding that framework were to first number one maintain the county’s fiscal stability by decreasing the amount of fund balance … maximize existing revenue, and recommend a responsible tax rate increase,” she said, explaining why the proposed 2‑cent property tax increase was modest and aimed at preserving reserve flexibility.
The package uses that increase (estimated to bring in about $17.1 million) to support a set of priorities the manager highlighted: roughly $11 million in new money for Durham Public Schools, funding for EMS staffing and ambulances and other public‑safety and capital needs. Staff also recommended a reduced draw on fund balance ($4.5 million less than the prior plan) to protect fiscal resilience in a year of uncertainty.
Tax administration staff cautioned the board that much of the revenue shortfall traced to the county’s 2025 reappraisal and an unusually large volume of taxpayer appeals. Tax staff said appeals reduced taxable valuation by approximately $2.3 billion from pre‑appeal estimates and that the county received 10,533 appeals compared with an earlier projection of about 7,500, explaining why budgeted new property tax dollars are so small this year.
Commissioners pressed staff on the tradeoffs between revenue and spending growth and asked for follow‑up materials, including a clearer breakdown of how the 2‑cent increase affects typical homeowners and the precise packages the tax increase would support. Manager Hager said staff will provide more details ahead of public hearings and later budget adoption votes.
Next step: commissioners scheduled further budget work sessions and a public hearing on the recommended budget; the board expects to consider adoption following the hearings and additional briefings.
