CHINA GROVE — The Town Council on Tuesday night moved a step closer to approving a proposed $4.26 million budget for fiscal year 2022-23 that includes a 2 cent property tax increase.

The council voted 4-1 to schedule a public hearing for its next meeting on June 7 at 6 p.m. for citizens to provide input on the town’s proposed budget. After the public hearing, the town council will likely take action on approving the budget ahead of the end of the current fiscal year on June 30.

Councilwoman Cheryl Sheets was the lone vote against scheduling the public hearing. Sheets said she voted against the motion because she would have liked to have had another budget work session this month to try to identify more places to cut costs and avoid the 2 cent increase.

“I would still like us to go back one more time and see what we can do to hold where we are and not do a tax increase this year,” Sheets said.

Mayor Charles Seaford said he didn’t think the town would have enough time to do that before the end of the fiscal year. The town must give 30 days before a public hearing and a public hearing must be held before the budget can be passed.

The budget being considered for approval is a mere $72,205 increase from the current fiscal year budget of $4.19 million. The 2 cent property tax increase, which will boost the town’s budget by an estimated $64,000, is largely needed to cover costs associated with inflation, according to Town Manager Ken Deal.

“Fuel cost is going to double for police, fire, public works. That’s huge in itself,” Deal said. “For employees, it’s the sheer cost of trying to keep up with the consumer price index and give them a raise to keep up with this inflation. It all reverts back to this inflation. That’s the whole thing we’re trying to keep up with.”

The proposed budget includes an 8% cost of living increase for town staff. To put that in perspective, the town increased its cost of living just 1.5% in its last budget. The last budget, however, also included a 2.5% merit increase not included in the proposed budget. Some employees receive merit increases based on positive job evaluations.

If the proposed budget is approved, it will be the first time in several years the Town Council has elected to increase property taxes. Last year, council members considered raising property taxes before voting instead to implement a service fee to cover the additional costs of garbage collection.

“We really needed to go up on taxes last year,” Seaford said. “But we, again, elected to hold back.”

Seaford said he doesn’t like the 2 cent increase, but believes the budget itself is “a good document.” Councilman Steve Stroud said he didn’t like increasing taxes either, but the town needed to “bite the bullet” instead of kicking the can down the road.

The 2 cent increase would bump the property tax rate from 54 cents to 56 cents per $100 valuation. For the average China Grove homeowner with an appraised value of $120,000, that would mean a property tax bill of $672 instead of $648, an increase of $24.

Town staff and council members have been chiseling the budget down for some time and held a budget work session last month. The projected property tax increase was closer to 10 cents at the start of the budgeting process before requests from department heads were removed. During the meeting, council members commended town staff for trimming the budget.

“We looked at it many times, cut back on a lot of things and we feel like this is the best we could come up with right now,” Deal said.

The proposed budget, described as “bare bones” by Councilman Don Bringle, does not include additional town personnel or any major capital improvements.

Not currently included in the proposed budget is the $1.3 million the town received in American Rescue Plan Act funding from the federal government. Sheets said she wanted to see that money included in the budget. Mayor Pro Tem Arthur Heggins said Finance Director Tara Nichols advised them to not include ARPA funding in the budget.

Deal said the town plans to use the ARPA funding as salary replacement to free up funding to make capital improvements not included in the proposed budget. That could help the town purchase items such as a knuckle boom truck requested by the public works department.

“We’ll talk about that in July or August and go forward with our plan to utilize that,” Deal said.