Winston-Salem property owners will see tax hike from voter-approved bond

Under the proposed 2019-20 budget, Winston-Salem property owners would see a 4-cent tax increase as a result of voters’ approval of a $122 million bond package last year.

The proposed 2019-20 budget under consideration by Winston-Salem City Council increases the municipal tax rate by 4 cents, which translates to an extra $60 for a home valued at $150,000.

The tax hike is directly tied to a $122 million bond package improved by voters last year.

“In order to pay for debt payments on the 2018 voter approved bonds, the current tax rate of 59.74 will be increased by 4 cents to the new proposed tax rate of 63.74 cents per $100 of assessed value,” City Manager Lee Garrity wrote in his budget message summary, released on May 23.

The proposed $496.4 million budget increases spending on debt service from $41.9 million in 2018-19 to $46.0 million in 2019-20. The city’s debt-service fund is expected to drop from $22.7 million to $3 million by 2025 and then recover to $25 million by 2030.

The proposed budget increases operations spending from $363.0 million to $368.4 million, funding a 2-percent pay bump for sworn police employees and certified fire employees effective Jan. 1, 2020, and a minimum-wage increase from $12.50 per hour to $13 effective July 1, 2019. Garrity said the “major drivers” in the increase in operations spending “are related to ongoing public-safety investments and the city’s commitment to employee compensation.”

Some council members expressed annoyance that, in their view, staff hasn’t adequately communicated the particulars of the budget to the public.

Councilwoman DD Adams, who represents the North Ward, predicted that “there’s going to be a little more engagement than we normally get on these budgets.

“Property taxes are going up because of the bonds, not what we do, and people need to understand that,” Adams continued. “But I think, council, we have an opportunity here that if we do our jobs — and again it goes back to [the fact] that we need to do better at what we’re doing with the communication, marketing and branding piece. Personally speaking, I don’t have anything against the people in that department, but I just think we are short and we might even go get some citizens, some businesses that do it, and they do it very well, because we can do better than this.”

The 2018 bond includes $43.7 million for streets and sidewalks, including $13.6 million for street resurfacing, $3.8 million for Business 40 enhancements, $2.3 million for a multi-use path, and a total of $5.1 million to convert Liberty, Main, First and Second streets to two-way. A $31 million parks and recreation bond includes $5.3 million for Winston Lake Park improvements, $3.7 million for Salem Lake Park improvements and $3.1. million to develop Quarry Park. A $21.1 million public-safety facilities bond is broken out with $9 million for a new radio communications system, $5 million for a new fire station, $3.6 million to replace Fire Station No. 3 on North Liberty Street and $3.5 million for a public-safety training complex. Voters also approved a $11.7 million bond for neighborhood revitalization, and $14.5 million for economic development.

While the city ramps up the 2018 bond program, spending from previous bonds continues, although the proposed capital-fund budget for 2019-2020 reflects a 34.5 percent decrease, from $125.1 million to $82 million.

The capital-projects fund for transportation in the proposed 2019-20 budget includes a number of big-ticket items, including $3 million for Meadowlark Drive and $2 million for the Novak Bridge replacement, along with $4.3 million for general bridge maintenance and repair, $1.1 million for street resurfacing and $29,700 for greenway development.

The proposed budget provides $2.9 million for economic incentives. It allocates $1 million to Caterpillar; $757,740 for the Wake Forest Innovation Quarter, including $344,000 to renovate Bailey Power Plant and $217,500 for Building 90 South; $278,800 to Herbalife; $183,850 to Brookstown Development Partners, which is developing the area around BB&T Ballpark; $151,130 to Inmar; and $100,000 for Merschel Plaza.

The budget also includes $1.8 million for unspecified recreation-maintenance projects.

But the biggest capital projects in the proposed budget fall under the crucial but unglamorous areas of water distribution, wastewater collection and water treatment, including $20 million to modernize the RW Neilson Water Treatment Plant and $15 million for a wastewater collection system improvement program. Out of $69.5 million earmarked for spending on what the city calls “Healthy Environment Capital Projects,” $35 million comes from revenue bonds, with the remainder coming out of reserves.