Edenton, N.C., weighs tax hike; Chowan, N.C., may let rate stand

Chowan County taxpayers would see the local property tax rate stay flat under a proposed county budget, though some service fees could go up.

In Edenton, however, residents face a property tax rate increase this year under a proposed budget. If approved, the current rate of 29 cents per $100 of assessed property value would increase by 1.5 cents.

Edenton's budget proposal had originally called for a bigger tax rate increase of 3 cents to make the town's payments on the new public safety center. However, changes were made to reduce the increase, said Town Manager Anne Marie Knighton.

Chowan County Manager Cliff Copeland said, "It's a tight year. We didn't want to go up on taxes." The county tax rate is 56 cents per $100 of assessed property value.

Despite keeping the tax rate at the same level, Copeland said, the county is grappling with low sales tax income. He said the county expects to collect the same amount of sales tax revenue it did in 2006.

Many, if not most, county departments are being budgeted below the current fiscal year in the proposed budget.

The Edenton-Chowan Board of Education requested a 14 percent increase over the current year but will likely only receive a 3 percent increase, Copeland said.

County employees are budgeted to receive a 1 percent cost-of-living adjustment and a $500 holiday bonus.

County water rates are expected to increase 5 percent to help pay for repairs or replacement of portions of the existing system as it ages in coming years. Impact fees are collected to pay for the installation or expansion of new lines, Copeland said.

On a positive note, he said that for the first time the county's Emergency Management System fund is self-supporting.

The county is also going to put any land transfer tax revenue into a capital outlay reserve fund for future projects.

In Edenton, sales tax revenue collections are down about $15,000 from the previous fiscal year, Knighton said.

"In my twenty years of budgeting and monitoring sales tax collections for the town I have never seen such a drastic decline," Knighton wrote in her budget message.

She suggested a conservative estimate of land transfer tax and sales tax revenues to avoid a major tax burden on residents in the future.

"I just cannot in good faith try to capitalize on projected growth that is not here yet," Knighton wrote.

Edenton's proposed budget includes no new positions, and employees are projected to receive a 2.5 percent cost of living increase.

Knighton originally suggested increasing the property tax rate 3 cents for the town's portion of the new public safety center. The first payment is due in July.

Knighton and the town's finance committee found two ways to trim the increase to 1.5 cents but still have the money for the public safety center payment.

First, the town could raise its solid waste fee to save 1 cent of the property tax increase. Residential rates could increase from $3.50 to $4.50 per month. Commercial rates may increase from $10 to $12.80 per month.

Second, a half-cent of the increase could also be trimmed because a payment to the town from the state will be higher than originally expected, Knighton said.

In the town's water and sewer fund, rates for customers using more than 11,000 gallons of water per month will likely increase, but there shouldn't be an effect on residential customers, she said.

Edenton is also grappling with the rising cost of energy. Wholesale electric rates are expected to increase 7 to 10 percent. Knighton suggested in her budget increasing the retail rates for its electric customers 7 percent in anticipation of the wholesale increase, which won't be decided by the North Carolina Eastern Municipal Power Agency until July 30.

Edenton held its public hearing this week and expects to approve its budget June 23.

Chowan County is scheduled to hold its public hearing at 6 p.m. Monday at the 1767 Chowan County Courthouse, 117 E. King Street.

Lauren King, (252) 338-2413, lauren.king@pilotonline.com