City Council met April 5 to discuss options for filling a $7.5 million gap for the 2010-11 budget. That gap has been reduced to $5.7 million with annual employee merit pay increases of about 2% taken out again this year.
Council reviewed several options, including further service and staff reductions, tax increases and other ways to increase funding. Last year, the city cut $6 million from its budget by reducing the number of staff, cutting staff benefits and reducing some services. This year, the city faces another budget shortfall because of declining sales and property tax revenues.
Highlights of the discussions included:
- Even with no increases in next year's budget, there is very little funding for ongoing maintenance needs such as street repaving and repairs.
- Currently, all of the city's property tax dollars are spent on public safety and repaying required debt on items such as the new police headquarters, new fire stations and the riverwalk. Property taxes make up about 60% of the city's total budget.
- Another 20% of the city's budget comes from sales tax revenues generated on sales throughout New Hanover County. Businesses inside the city limits generate 80% of all sales taxes in the county, but the city only receives about 20% of those revenues. The city's share of sales tax revenue has been decreasing over the last several years.
- Of the few increases in staffing over the last five years, almost all has been in public safety. Per capita, Wilmington spends more on public safety than most large cities in North Carolina, including Raleigh, Winston-Salem and Durham.
- Examples of service reductions of 3%, 5% and 10% of the city's budget were presented. Those examples include closing one or two fire stations, less street lights and street paving and eliminating the police department's traffic unit. Staff cuts of up to 76 positions were included.
- Council also discussed a possible tax increase to help bridge the budget gap. A 3-cent tax increase would bridge some, but not all, of the gap. The median home price in Wilmington is $185,000. A 3-cent tax increase on a home valued at $185,000 would cost $4.62 a month.
- Over the next few weeks, staff will provide more information about potential cuts to the Council, get feedback on those cuts and then develop a recommended budget to presented on May 4. Council will vote on a final budget in June.
View some fast facts about the city's budget.