Budget Update: Orange County Commissioners weigh amendments June 4, 2026.

Marilyn Carter
Jun 3
5 min read

Updated: 2 days ago

Dear All -

I recently attended a Homebuilders' Association event, as well as two ceremonies in recognition of Memorial Day. June marks Pride Month, Gun Violence Awareness Month and of course, Juneteenth. I will share some highlights below, but first...

On May 12 and May 28, the Board of Commissioners heard from dozens of residents in two Public Hearings for the Orange County FY2026-27 proposed Budget. We listened closely to community feedback on a variety of topics.

In this update, I'll share some of the key changes proposed in this year's budget, as well as my priorities as the Commissioners prepare to discuss budget amendments on Thursday, June 4 at 7 pm.

As always, I welcome your feedback.

-Marilyn

First, let's recap the proposed Orange County Budget.

Each year, the County Manager presents the Commissioners with a Recommended Operating Budget, as well as a proposed update to the 10-yr Capital Investment Plan.

These two are intertwined. Specifically, capital projects, like those underway for building 2 new schools in Orange County, are funded through bond issuances. Bonds require the county to pay interest (aka debt service), and these costs show up in the operating budget. The ability to offer bonds at the best rates, and therefore, to maximize every capital dollar for projects, is directly related to the County's operational rigor.

The FY2026-27 Recommended Operating Budget includes $325.1 million in General Fund revenue, which covers 3 areas:

Debt service and pay-go to support the County’s capital program--including school construction
Personnel and operating expenses to support K-12 schools and Durham Technical Community College education
Personnel and operating expenses to fund the delivery of County services.

Key Budget Priorities:

Minimize tax rate increases while maintaining core services
- Prioritize public safety and social services
- Support school funding amid declining enrollment
- Maximize operational efficiencies
- Invest modestly in employee compensation
Align investments with strategic goals

Closing the Gap:

The manager began this planning cycle with a roughly $20M budget gap due to unfunded federal mandates (for SNAP and Medicaid) and rapidly rising costs, including for insurance, fuel, vehicles and maintenance. The county is also seeing the rapid acceleration of commercial properties using a state-level property tax exemption loophole - a loophole that the NC Association of County Commissioners is lobbying the legislature to close.

The recommended budget closed a good portion of that gap with cuts, some quite painful, including: eliminating 13 full-time positions, suspending STEP pay for public safety and social service employees, adopting a modest 2% Cost-of-Living adjustment (when inflation as of April is 3.8%), reducing funding for the Orange County libraries, the Town of Chapel Hill Public Library, and more.

What about funding for our schools?

To close the remaining gap and still provide for a modest operational funding increase for our two school systems, the Manager also has recommended a 3.75 cent increase in the property tax-rate.

Like our county, our schools face a challenging environment that includes rising costs for employee health insurance, fuel and maintenance, coupled with chronic underfunding from the state. In addition, student enrollment has been declining (277 fewer CHCCS students, 174 fewer OCS students), and is anticipated to continue declining, consistent with lower birthrates and attrition to charter, private and home-based schools.

The manager's proposed budget provides for a 2.5% increase in current K-12 expense funding to $114.1 million (representing a $294 increase in per-pupil funding to $6,171). For Chapel Hill-Carrboro City Schools (CHCCS), the Special District Tax provides for an additional amount per pupil.

When the cost of debt service for school construction and major repairs is factored in, total school funding grows 6.0% to $148.4 million.

In spite of this growth, it is still short of the CHCCS and Orange County Schools (OCS) continuation requests.

Adding to the uncertainty: School Boards and Counties continue to wait on the NC Legislature to pass a one-year-overdue budget.

While my colleagues and I agree we want to increase school funding, there are differing views on how far we can go while still balancing the Key Budget Priorities.

Our public employees deserve our thanks - and our support.

The public employees who take care of our community, including teachers, are hard-working, dedicated professionals. Our Emergency Services, public safety officers and social services professionals protect our lives and the lives of the vulnerable--in many cases, while risking their own.

Furthermore, county staff deserve recognition as well--many put in long hours in difficult conditions serving our residents, especially at a time when our residents themselves are feeling economic pressures.

The budget trade-offs are real.

There is a fundamental tension between the need to cover rising costs and the need to minimize increases on property taxes, which place additional strain on those residents who are least able to absorb it.

These are painful choices in a difficult budget year, driven to a great extent by state and federal policies--and as Commissioners, we need to meet the challenge.

Let's not forget, the NC legislative majority plans to constrain the taxing authority of counties, beginning with a "wow, this sounds great but what's the catch?" Constitutional amendment that will impose levy limits for counties. This will appear on our ballots in November, and if passed, will put even more pressure on the non-mandated services that so many of our residents, including yours truly, value and appreciate - including libraries, the arts and more.

Here's what I support:

I support efforts to seek increased funding for our schools to help retain teachers, even in the face of declining enrollment, while minimizing additional tax increases beyond the Manager's recommendation.

I strongly support reinstating the STEP increases for our Emergency Services, public safety and social services professionals.

I also support seeking an employee pay increase that is more than the currently recommended 2%. Orange County exhibited fiscal restraint last year as properties were being revalued. While town governments across the region implemented significantly higher tax increases, Orange County held its tax rate very close to the revenue neutral tax rate (+1.19 cents).

I also support "Choose Orange,” a workforce housing pilot program for county frontline employees. An amendment co-sponsored by Commissioners Phyllis Portie-Ascott, Earl McKee and me would direct the County Manager to study and recommend a pilot program to the Board, drawing on the experience of Chatham County and the Town of Chapel Hill.

The Board has repeatedly heard that Orange County public employees cannot afford to live in the community they serve. I believe we are at a moment to act upon that feedback.

The crux of the Commissioners' discussion on Thursday will be:

How much can we increase funding for schools and employees while still minimizing the impact of an additional tax increase?

Now, here's more about May and June happenings:

RECOGNIZING MEMORIAL DAY

On Monday, May 25, Orange County, Chapel Hill, Carrboro and Hillsborough hosted a Memorial Day ceremony at the Orange County Veterans Memorial. Jocelyn Mitnaul Mallette, NC Secretary of Military and Veterans Affairs, gave a heartfelt keynote speech recognizing the sacrifices of NC military members and their families in service of their country, including Purple Heart recipients and Gold Star families.

AT THE HOUSING & DEVELOPMENT SUMMIT BREAKFAST

At a ribbon cutting for Morinaga-America, Inc. with Gov. Josh Stein and Commissioner Phyllis Portie-Ascott

On May 27, I attended an event hosted by the HBA of Durham, Orange and Chatham Counties. The discussion explored how affordable housing developers assess the feasibility of projects - together with Commissioner Jamezetta Bedford. .