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ASHEVILLE – City property owners could see the equivalent of a combined city-county 5.1-cent tax rate increase to fund raises for municipal workers, education and other services and programs. 

Asheville staff proposed a 3-cent increase at a May 11 budget City Council budget work session. If agreed to by the council that could come on top of a proposed 2.1-cent hike by Buncombe County officials. 

The increase would be the equivalent of a $105 annual tax bill increase for a median-priced $294,500 home.

Buncombe and Asheville elected officials will make final decisions on county and city tax rates prior to the start of the July 1 fiscal year.

While the rates will be the same for all property owners, the actual changes in bills will vary per property because it is a revaluation year. That is when all county property owners are assigned new values for the purpose of calculating tax bills. 

City home, business and land owners pay both county and city taxes. Many city residents, but not all, also pay a relatively small Asheville City Schools property tax.

The new city taxes would generate $5.7 million. The county’s proposed increase would generate $10 million with one of the biggest new expenditures being an additional $2.7 for K-12 funding and Asheville-Buncombe Technical Community College.

The additional city tax money would go in large part to implement $7.9 million in pay increases recommended to stop a wave of staff turnover. In March, the council discussed the pay increase that also included $1.1 million to bring the lowest-paid workers up to a living wage.

More: Tax increases likely to hit hard in historically Black Asheville neighborhood, east Buncombe; rich could see decrease

The second-biggest city expenditure highlighted at the May 11 budget meeting was $1.3 million for transit, which would extend evening hours, increase frequency for routes between downtown and South Asheville and cover cost increases to existing services.

More: Asheville wants residents to vote on sales tax hike for transit

City Manager Debra Campbell, who was hired in 2018, said worker raises were important for morale that was badly damaged when a prior compensation study was not fully implemented, leading to pay increases for some, but not others.

“The greatest issue that I heard from every employee that I met with was around pay, and it was around the fact that a compensation study had been done several years ago and wasn’t fully implemented,” she said. “It created such a huge morale issue.”

Staff and council members supporting a pay increase noted $1.6 million would come from police salaries that will not be paid because of the large amount of attrition in the department.

Councilwoman Gwen Wisler said the raises would compensate employees for a year with no pay increases and additional stress as they continued to work and provide services during the pandemic. 

“Everything I read says, wages are going up. And so, and we’re competing in the same environment as everyone else,” Wisler said. “It’s a way to thank our employees. And I think it’s going to make the city more efficient.”

But Councilwoman Kim Roney said she was concerned tax increases could exacerbate gentrification.

She said the investment in transit, housing and other services, was good, but “it could potentially cause more harm.”

Roney suggested possibly not filling all of the $1.1 million in positions that had been held vacant. She also said the city should look at ways to reduce tax payments for people at lower income levels.

Mayor Esther Manheimer said she also wanted to learn more about the potential for rebating taxes to lower-income residents. North Carolina state law gives little flexibility to local governments in how it can charge property taxes, mandating that all property owners are charged the same rate, no matter property value, income or how many homes someone owns.

The programs had been studied by the council’s finance committee, Wisler said, but turned out not to be as useful as committee members hoped.

Joel Burgess has lived in WNC for more than 20 years, covering politics, government and other news. He’s written award-winning stories on topics ranging from gerrymandering to police use of force. Please help support this type of journalism with a subscription to the Citizen Times.

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