Some Orange County homeowners could pay higher property taxes next year to support schools and key county programs under a proposed budget released Tuesday.
County Manager Travis Myren noted the current “environment of extreme uncertainty” in recommending his $311.9 million operating budget. That marks a 6% increase over the current budget and includes a 2.95-cent property tax rate increase, he said.
A roughly $7 million injection from the county’s fund balance — money left over after the bills are paid — would fill the gaps.
The proposed budget includes $111.3 million for the Chapel Hill-Carrboro and Orange County school districts — a 3% increase that would only cover a portion of the money that the districts say they need to meet rising costs.
“In the broader economy, trade tariffs will cause prices to increase on a range of goods from building supplies to technology. For our community, higher prices will cut into family budgets and potentially jeopardize essentials like housing and health care,” Myren said in his 2025-26 budget message.
The proposed budget sets the tax rate at 65.59 cents per $100 in property value, just above the revenue neutral rate determined after this year’s revaluation.
The revenue neutral rate goes down as property values go up to bring in the same revenue that Orange County received last year. The extra 2.95 cents includes 1.01 cents for school and county operations, and 1.94 cents for school facilities planning and design.
If approved, the owner of a home valued at $400,000 would pay a total county tax bill of $2,623.60. A $700,000 home would generate a county tax bill of $4,591.30.
Hillsborough residents also pay town taxes, and Chapel Hill and Carrboro residents pay town taxes, plus a Chapel Hill-Carrboro school district tax.
Carrboro’s recommended budget was released Tuesday, and Chapel Hill’s budget will be presented Wednesday. Hillsborough’s town manager will release his proposed budget May 12.
All the draft budgets could change as elected officials review them in the coming weeks. The final budgets will be approved in June and take effect July 1.
Orange County is facing additional pressure this year, because of inflation, federal tariffs, and potential changes in federal funding and departments, Myren said.
At risk is over $20.6 million in federal funding to the county and another $15.8 million that supports the schools, officials said.
Other challenges, including the loss of anticipated federal or state funding, won’t be known until later this year and could force the county to consider more budget cuts or freezing or eliminating jobs.
Another unknown is the county’s sales tax revenues, which have slowed since 2024 but still cover about 15% of the budget. The state won’t release the latest reports until July, Myren said.
That leaves property taxes to cover two-thirds of the county’s operating budget. But homeowners are already stretched thin, and many have asked the commissioners to make deeper budget cuts or delay the revaluation.
Orange County has delayed a revaluation before, but state law requires one this year, because the local sales ratio — the difference between market and assessed property values — fell below an 85% threshold.
Orange County homeowners saw property values increase 50% or more, the tax office reported. The median sale price for a home now ranges from $385,500 in Mebane to $660,000 in Chapel Hill, county tax officials have said. The average sale price is $512,200.
Current operating budget: $294.5 million
Proposed operating budget: $311.9 million, a 6% increase
Current county tax rate: 86.29 cents per $100 in assessed property value
Revenue neutral tax rate: 62.64 cents
Proposed county tax rate: 65.59 cents
Some highlights: The county will absorb mental health coordinator and social worker positions previously funded with federal grants. The Sheriff’s Office could add two mechanics and a parts budget, and all county employees could get a 2% raise. At least $297,000 is budgeted for programs addressing homelessness, emergency housing, urgent home repairs, and aging adults.
Fire district taxes: 10 rural fire departments want higher fire district tax rates. Only Little River and Eno did not seek an increase.
Tax payment help: Adds $24,000 the county’s Longtime Homeowners Assistance program, for a total of $274,000.
Public hearings: 7 p.m. May 13, Southern Human Services Center in Chapel Hill, and 7 p.m. May 29, Whitted Building in Hillsborough.
Budget vote: The commissioners will approve a resolution of intent to adopt the budget on June 5. The final vote is June 17.
Read the budget: orangecountync.gov/730/Annual-Operating-Budget
? Orange County receives over $20.6 million in federal money each year, or nearly 7% of its general fund budget.
? Over $9.3 million pays to administer social services programs, including Medicaid and food and nutrition programs.
? $7 million pays to administer federal housing vouchers. Another $1 million funds affordable housing programs.
? About $3.3 million funds various programs, including for older adults, child support, emergency services, health and transit.
? $235 million in direct payments help residents, including $205.5 million in Medicaid payments and $22 million in food and nutrition.
? Federal money is 5% to 6% of local school budgets. In CHCCS, that is $9.2 million each year, and in OCS, $6.6 million.
? Federal funds are critical for free and reduced-price lunches and summer food programs. The alternative is limiting menu items or raising lunch fees for all families.
? Federal funding supports Title I programs for lower-income students and professional development and support programs for staff.
? Cuts could affect students with disabilities; Head Start and pre-K programs; and career and technical education classes.
Current budget: $63.1 million, plus about $28.4 million from the district property tax
Proposed budget: $64.7 million, plus about $28.8 million in property taxes
District requested: $10.3 million more, including $3.3 million for increasing salary and benefit costs, and $7 million for “wants,” such as master’s degree pay, restoring school support positions, and supplementing classified and certified staff pay.
District tax rate: 14.41 cents per $100 in assessed property value
CHCCS tax bill: $720.50 for a home valued at $500,000
Local money per pupil: $8,491 per student, an increase of $274 each with the district tax
Current budget: $45 million
Proposed budget: $46.6 million
District requested: $4.1 million more, including $1.8 million for rising salary and benefit costs, plus $2.3 million to pay bus drivers more and add a staff pay supplement.
Local money per pupil: $5,877 per student, an increase of $211 each