KNIGHTDALE — Town budget writers aren’t quite ready to make the tough decisions. A proposed budget presented to the town’s budget committee assumes that legislation under consideration in the General Assembly – which could cost the town as much as $575,000 – won’t pass. If it does, town leaders say they’ll decide then how to cut the budget.
Budget projections presented last week estimate Knightdale government will have about $80,000 less to fund operations during the next fiscal year.
Knightdale’s Budget Committee is reviewing a drafted budget for FY 2013-2014 of about $14.78 million, down from $14.86 million this year. Several tax reform proposals – SB 394 being the most sweeping – eliminate taxes local governments depend on for revenue, and could cost Knightdale as much as $575,000 in tax revenues if signed into law.
“If that happens, we’ll amend the budget by January, when (the proposed laws) would become effective,” said James Overton, Knightdale finance director.
Taxes targeted for reform by legislators include the beer and wine tax, 1-cent food sales tax, utilities taxes and annual business taxes. Legislators have said lost revenue would be replaced by expanding sales taxes, but “there is no way to estimate how much revenue would be received from this new sales tax, as we don’t have any prior history as basis for estimate,” Knightdale spokesman Brian Bowman said in an email.
The drafted budget includes a 2-cent increase in the property tax rate and a 9 percent increase in water and sewer rates.
The 2-cent property tax increase brings the rate to 43 cents per $100 of assessed property value, and was approved by Knightdale voters in November through a bond referendum to help fund the forthcoming park on First Avenue.
The water and sewer rate increase brings the monthly bill to $72 a month from $68 a month for the average Knightdale family. The increase is the result of a deal Knightdale made with Raleigh in 2012, which will help Knightdale repay Raleigh by 2018 for debt it owes from a utilities merger in 2006.
Altogether, the average Knightdale homeowner is projected to pay an additional $97 more in additional taxes and fees this year.
The budget committee is expected to send the drafted budget to Knightdale Town Council in June. At its next meeting at 6 p.m. on May 6, the panel will review proposed budgets for the fire, police, and parks and recreation departments.