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Winston-Salem City Budget Includes Tax Increase, Layoffs

12:20 PM, Jun 19, 2012   |    comments
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Winston-Salem, NC -- It's official, property taxes are going up in the city of Winston-Salem.

The City Council cut more than $6-million from the city's 2012-2013 budget, but it still wasn't enough.

When all was said and done Monday night, leaders in the Twin City adopted its news Fiscal Budget...price tag: $392 Million.

Information provided by the city on the adopted budget, including a tax increase:

The budget as adopted cuts $6.2 million from the $398.2 million budget that City Manager Lee Garrity recommended. That proposal called for a tax rate of 51.7 cents, an increase of 4.2 cents.

The adopted budget does not include a 30-cent increase in bus fares and does not implement Sunday bus service on selected routes, both of which were proposed. The council will consider Sunday service separately in September.

To minimize the tax-rate increase, the council made a series of cuts in the proposed budget, including $2.67 million in personnel costs, $900,000 in support to economic-development and parking funds, $845,000 in operating costs, and $255,000 for replacing equipment.

The total budget of $392 million represents an increase of 0.35 percent over the budget for 2011-12.

The budget for the General Fund, which accounts for city functions supported by taxes, is $174.7 million, an increase of 1.8 percent.

Overall the budget allocates $331.9 million for operations and debt service, and $60.1 million for capital improvements.

To reduce personnel costs, the City Council voted to give city employees a $250 pay increase instead of the 1.5 percent merit increase in the proposed budget. This saved $1.1 million.

Other personnel cost-savings include:

-- Eliminating selected vacant city jobs, saving $300,000.

-- Laying off selected management and professional employees, saving $700,000.

-- Eliminating a second police recruiting class during the fiscal year, saving $575,000.

The budget also:

  • Maintains grants to community agencies at current levels.
  • Allocates $1.9 million to address a backlog in sidewalk construction and street resurfacing.
  • Has no new user fees and keeps all existing user fees at current levels, except for a 9.75-percent increase in water and sewer rates approved earlier this month by the Utility Commission.

Background: On Monday night, the City Council approved the budget that calls for a 3.4% property tax increase.

According to Mayor Allen Joines, Winston-Salem hasn't had a tax increase in about seven years, and it's caught up with them.

Joines said in order to keep up the current level of services, homeowners have to pay up.

At the meeting Monday night, some homeowners were not happy to hear that.

"You say $20 ain't much, on $100,000 house, but you got to realize, the people in the city have got to pay county taxes too," said one homeowner.

"You have to consider that when you're raising taxes, you're raising taxes on people whose homes have aged 30 years. And we're having difficulties, especially if you're a senior, keeping up with just keeping the house," said another homeowner.

The property tax increase comes to about a $20 increase in property taxes if you own a $125,000 home.

That's not the only change in the new budget.

The city will have to postpone a police recruit class, which means fewer new officers.

The city will not be buying any new computers at City Hall, which means, if you email something to City Hall, they might not be able to open it because it will soon be incompatible.

The city staff will receive a $250 salary increase to help mitigate the rising cost of their health insurance.

However, 10-14 people will be laid off -- mostly managers.

"We never like to raise taxes. That's the reason we worked so hard to get it down. But still, we realize it's tough on taxpayers. We've done everything we can to get it hammered together and keeping the services at a level the citizens wants," said Mayor Allen Joines.

The salary increase does not include the mayor or city council members.

Even with the tax increase, Winston-Salem still has one of the lowest tax rate of all the cities in North Carolina.

WFMY News 2

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