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Budget Message <br /> Recommended Tax Rates <br /> Ad Valorem Tax Rate — Revenues generated by the County's ad valorem property tax <br /> support day-to-day County and School operations budgeted in the General Fund. The <br /> recommended ad valorem mm pmpe�� tax rate next year 85.8 cents per of <br /> assessed valuation. This rate is the revenue neutral rate.One cent on the property tax rate <br /> should generate$1,505,352 in the upcoming fiscal year. <br /> Chapel Hill Carrboro City Schools District Tax — The voter approved Chapel Hill City <br /> Schools District Tax provides additional revenue to the school district over and above the <br /> County's ad valorem tax. This recommended budget provides for the revenue neutral rate <br /> of 18.e4 cents per$100 assessed value. The approved tax rate for the current year is 23 <br /> cents per$100 assessed value. Based on this tax rate,the District will receive an estimated <br /> $18,721,785 or$1,597 per pupil.One cent on the school special district tax should generate <br /> $993,725. Voters in the Orange County School District have not authorized a special district <br /> tax to supplement its amount received from the County's General Fund for current expense. <br /> Fire District Tax Rates — As outlined in the Fire Districts section of the recommended <br /> uvugm, revenue neutral tax rates range from 2.16 cents to 7.85 cents per$100 valuation. <br /> Some districts have requested tax rates above the revenue neutral rate. In those instances <br /> I have recommended the revenue neutral rate and have notified the districts they will need <br /> to present their needs to Commissioners at a work session in June. This approach is <br /> consistent with Board direction to me earlier this spring. <br /> Revenue Highlights <br /> Property Tax Revenue - Property taxes make up $130s mioion, or r00%, of the <br /> recommended General Fund revenue base of$177.6 million. This equates to a$2.2 million <br /> increase from the current year budget of$138 million and is reflective of natural growth in the <br /> tax base. <br /> Sales Tax Revenue — Sales tax revenue for FY 2009-10 decreases by $2.1 million. The <br /> reason for the decrease is two-fold. The foremost reason relates directly to the General <br /> Assembly's Medicaid Relief/Sales Tax Swap legislation approved in 2007. A key component <br /> of that legislation provided for the State to "relieve" counties of their longstanding <br /> responsibility of paying Medicaid costs. In wm, recognizing the State had no revenue to <br /> cover this new financial reop000imoty, the General Assembly decided to use proceeds from <br /> Article 44 sales tax to cover the cost. The Board may recall counties have been authorized <br /> to collect Article 44 sales tax since the State took Intangibles Taxes from local governments <br /> in 2001. In addition, the legislation reverted a small portion of counties' remaining sales <br /> taxes to towns in an effort to hold those entities harmless from potential loss of sales taxes <br /> because of the legislation. <br /> The phased in Medicaid Relief/Sales Tax Swap plan began in 2007 and will be fully <br /> implemented by July 1, 2009. Thus, the amount of money budgeted for Article 44 sales tax <br /> in FY 2008-09, $1.9 million, will decrease to zero in FY 2009-10. To offset that loss of <br />