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Originally published: 2014-06-03 20:10:20
Last modified: 2014-06-03 20:11:14

Boone property tax increase proposed

by Anna Oakes

As anticipated, Boone Town Manager Greg Young recommended a five-cent property tax increase in his recommended budget for fiscal year 2014-15.

Young signaled he would recommend a tax increase at a budget meeting held in April, noting that the economy, high fuel costs and last year's change in sales tax distribution continue to have negative impacts on the town's finances.

"Due to the change in sales tax distribution and its associated loss of revenue in the General Fund as well as the budget-balancing actions used last year, I am proposing a $0.05 tax increase," Young wrote in his budget message dated May 29.

The increase would bring Boone's ad valorem rate up to 42 cents per $100 valuation -- a 13.5 percent increase. For a property valued at $200,000, town taxes would increase from $740 per year to $840.

The Watauga County Board of Commissioners decided to switch local sales tax distribution from a per capita method to an ad valorem method in spring 2013 and this year denied Boone's request to restore the per capita method. The change resulted in an approximate $2 million decrease in annual revenue to the town of Boone.

Young had recommended a five-cent property tax increase for the 2013-14 fiscal year as well, but the council instead opted to cut General Fund expenditures and dip into undesignated reserve funds to balance the budget without a tax hike.

Young said his proposed budget maintains basic services and existing personnel while keeping departmental budgets flat. He recommends a 3 percent cost-of-living pay increase and a 2 percent merit increase for town employees.

"The last town budget which reflected a merit increase was for the 2008-09 fiscal year," the budget message stated. "Additionally, there has not been a cost-of-living adjustment for employees since the 2012-13 fiscal year."

Also recommended is a 50-cent increase in water rates as part of several years of incremental increases in anticipation of debt service payments on the town's water intake project.

The Boone Town Council will discuss budget matters and priorities at a budget workshop beginning at 8:30 a.m. on Monday, June 9, at the Council Chambers at 1500 Blowing Rock Road. If needed, a second meeting on the budget will be held beginning at 3 p.m. on Tuesday, June 10.