Asheville 3-cent tax hike? Council looks at how to fund climate change measures, road repairs

ASHEVILLE - Fighting climate change, building fire stations that help reduce cancer, Dealing with a "drug needle litter crisis" — those were among priorities listed by City Council members during a Jan. 14 budget work session.

But paying for them with Asheville's current mix of property, sales and other taxes isn't doable, according to city budget forecasters who said the money that would be needed to continue even current services could outpace revenue by up to $3 million in the next fiscal year, which starts July 1.

"We're already in the hole," said Mayor Esther Manheimer.

3 cents for trees, housing, transit

The most detailed proposal for more revenue came from two council members, Julie Mayfield and Keith Young, who said a 3-cent property tax increase would generate $4.5 million for their list of "climate and affordability response" programs.

The money would go to public transit, reversing tree canopy loss, renewable energy investments including weatherization for low-income residents, as well as affordable housing efforts such as vouchers to help the poorest residents afford private rent and operating costs for a public land trust.

"We wanted to put this on the table as a starting point for conversations," said Mayfield, who is running for North Carolina Senate. "These issues have been identified multiple times as priorities for our community."

Young and Mayfield said budgets typically amount to fights between competing interests, so they tried to lessen that by working with a variety of environmental and social justice advocates. Those who consulted with them came from the Sierra Club, Just Economics, Asheville GreenWorks, the WNC Renewables Coalition, Sunrise Movement Asheville and two council-appointed boards, the Urban Forestry Commission and the Sustainability Advisory Committee on the Energy and Environment. The WNC Sierra Club and MountainTrue, an environmental nonprofit headed by Mayfield, have officially backed the deal, while the other groups have not yet made formal decisions.

Members said they understood the negative impacts of a property tax increase on poorer residents, but noted it was one of the few ways state law allows cities to raise revenue. The increase would amount to $30 more in taxes for the owner of a $100,000 home or $90 for the owner of a $300,000 home.

The group said it is exploring ways to decrease the impact of the increase, including encouraging property owners to take advantage of existing tax breaks for the low-income elderly, low-income disabled and spouses of deceased disabled veterans. City staff are also looking at the possibility of property tax rebates to all owners under certain income levels, they said.

The poorest residents would benefit the most, though all would feel positive effects, Young said.

"This impacts people in a way that is going to be beneficial to quality of life for everyone."

City Council offers questions, criticism

Vice Mayor Gwen Wisler didn't offer a position on the proposal but asked for more information on how landlords might react to the additional cost, and if they would likely pass it on to renters.

"Because that is half of the people of Asheville," Wisler said.

Councilman Vijay Kapoor complimented the proposal's detail and the issues it raised, saying they were important, but said the City Council should focus on what he called more basic priorities. Those included road repairs and other infrastructure funding, pay for city employees and public safety problems such as needle litter.

"If we as a council we aren’t fulfilling those responsibilities, we’re failing at our jobs," Kapoor said.

Mayor Esther Manheimer pointed to $600 million in requested projects. Those would likely get some outside funding, but would still require significant city resources in years to come, she said. On that list were outdated fire stations where, Manheimer said, "gear is located in the same area where the men and women are sleeping," a practice now associated with cancer risk.

Manheimer said funding could come from voter-approved bond borrowing. Because bonds would also require a tax increase, she suggested Young and Mayfield add their proposal to that, though it would require an additional year of waiting.

Young responded, questioning the need for more infrastructure maintenance and saying city staff members in the work session had noted increased attention there.

"We’ve spent more in the last six years than we’ve spent in 20 years," he said.

Mayfield said she felt an obligation to push for the climate and affordability issues, with her time in city office ending in a year. "These are priorities that I came into office with and would like to see significant movement on."

Related:

Affordable housing, rising rents, nifty new tools: 11 takeaways from the Asheville development forum

Almost half of Buncombe County renters are cost burdened. Can local leaders close the gap?

What are your property taxes?

While the City Council has the power to raise and lower Asheville's property tax rate, city residents also pay Buncombe County property tax with a rate set by the county's elected Board of Commissioners. Residents living in the Asheville City Schools District, which is smaller than city limits, pay an additional property tax.

City rate: 42.89 cents (proposed to increase to 45.89 cents)

42.89 cents (proposed to increase to 45.89 cents) County: 52.9 cents

52.9 cents Asheville City Schools: 12 cents

How do you figure your property tax? Rates are set per $100 of assessed value. So, divide your county assessed property value by 100, then multiply it by the rate. EXAMPLE: $200,000 home, divided by $100 = $2,000 x 1.0779 (city, county and city schools) = $2,1558.