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Guest Opinion: Former Huntersville mayor calls property tax hike ‘extreme’

May 20. By John Aneralla. [Opinion] Is it necessary to have an almost 30% property tax increase in Huntersville? Absolutely not.

Staff and the Town Board are blaming this extreme tax increase on transitioning to a full-time fire department, hiring additional police officers and the previous board.

John Aneralla

Public safety is the No. 1 responsibility of all town governments but is it necessary to raise taxes prior to the implementation of full-time fire and adding more police officers?

Despite the previous board rejecting the town manager’s tax rate increase proposal last year, the town is projected to produce millions in surplus in Fiscal Year 2024 ending June 30.

The current fund balance as a percentage of the total revenues of the town’s 2024 budget is projected to be 88 percent of the total revenues necessary to run the town annually well above the town’s 40 percent fund balance policy.

Anyone feeling overtaxed?

The town’s fund balance policy rate is considerably higher than the average community that is triple A rated in North Carolina. (Apex 25 percent, Greensboro 9 percent, Asheville 15 percent, Chapel Hill 10-12 percent, Charlotte 17 percent, Cary 33.3 percent.)

The town manager’s budget projects $28 million of fund balance spending (one-time) over the next five years leaving the fund balance at 47.6 percent at the end of fiscal 2029.

My contention is the fund balance is too high and should be reduced to the 20% range over the next 5 years rather than increase taxes by 30 percent this year.

As an example, a tax rate increase of 13.6 percent (still high) this year and holding it for five years brings the fund balance down to 20 percent at the end of fiscal year 2029 and funds all of the projects and debt in the manager’s budget. The fund balance would then be in line with other AAA rated communities in NC.

The town could also delay issuing recently approved debt and use fund balance above Huntersville’s minimum as a funding source for one-time capital needs.

Funding with “pay-as-you-go” capital considered through the annual budget process would be much more financially responsible than hiking property taxes 30 percent in one year.

Please remember that most capital projects (roads/sidewalks/greenways) take over five years to complete. Financing a project with debt today but not using all of the proceeds costs current taxpayers who may not benefit from the project in the future. Pay as you go is a more taxpayer friendly way of spreading the burden of paying for projects to those who will receive the benefits of using the road, greenway or sidewalk.

This is something we did in 2016 when the town manager’s budget recommended issuing debt that year and two property tax increases over the next five years.

We delayed issuing the debt until 2020 at an interest rate which was the lowest in NC history. This action saved Huntersville tax payers millions of dollars from 2016 until 2020.

The bond proceeds immediately went into much needed road projects as everyone can see by the numerous orange cones throughout the town.

Another suggestion would be for the town board to re-prioritize projects/delay projects.

Is a project absolutely a need project that will serve a large swath our community or a want project that will help only a few?

Aneralla at a Newsmakers Breakfast at The Peninsula Club

It’s time for the current Town Board to push back on the manager’s proposed budget and projections (Sales tax receipts budgeted to be lower in 2029 than 2023?); ask tougher questions and reprioritize certain projects in order to maintain a more reasonable property tax rate.

—John Aneralla

Aneralla was mayor of Huntersville from 2015-2021. The proposed budget will be the subject of a public hearing at tonight’s Town Board meeting. The meeting begins at 6 pm at Huntersville Town Hall.