CHINA GROVE — The town council has passed a 2022-23 fiscal year budget that raises the property tax rate by 2 cents.

Town Manager Ken Deal said “nobody wanted” to raise the tax rate, but an increase was unavoidable due to rising operational costs. Deal added that the potential tax increase was several cents higher before staff and council made cuts during the budget planning process.

“You have to do what you have to do,” he said.

The 2 cent increase will bump the tax rate from 54 cents to 56 cents per $100 valuation. The increase will generate $64,000 in additional tax revenue for the town. For a homeowner with an appraised value of $120,000, that would mean a property tax bill of $672 instead of $648, an increase of $24. Property taxes make up 42.4% of general fund revenue for the town.

The general fund budget is $4.26 million, a 1.7% or $72,205 increase from the current budget of $4.19 million. The budget was passed by a 4-1 vote, with Council Member Cheryl Sheets being the lone vote against.

Before the budget was passed at a meeting on June 7, Sheets said she wanted to try to eliminate the 2 cent tax increase by using funding from the American Rescue Plan Act. China Grove is slated to receive $1.3 million in funding. Sheets’ husband, Gary, spoke against the tax increase during the meeting, saying that average citizen in China Grove cannot afford a tax increase.

The town has budgeted an 8% cost of living adjustment (COLA) increase for staff. Other local municipalities such as Landis and Rowan County have also made significant COLA increases in an effort to retain employees by offering competitive wages as inflation continues. The town increased its cost of living adjustment just 1.5% in its 2021-22 budget. The last budget, however, also included a 2.5% merit increase not included in the proposed budget.

Sheets said the town could find a way to increase COLA without a 2 cent tax increase. Council Member Steve Stroud said he did not think ARPA funds should be used for salary increases.

No new positions were created in the budget. However, Deal said the town will consider hiring a new planning technician in the next fiscal year due to the amount of residential and industrial projects being planned in the town.

The town plans on using the $1.3 million it will receive in ARPA funding as salary replacement to free up funding to make capital improvements, such as buying a knuckle boom truck for $185,000 for the Public Works Department. None of those capital purchases are included in the budget because, but Deal said the town will likely discuss moving forward with purchases in the coming months.

In passing the budget, town council also passed a five year capital improvement plan. The plan does not bind the town to make any major purchases, but lays out $6.8 million in potential improvements the town would ideally like to make between now and 2027. Most of the items in the plan, including a public works facility and west side neighborhood sidewalks, are unfunded at this time. Others, like the knuckle boom, could be purchased sooner rather than later with ARPA funds. Some larger items in the plan are improvements to Hanna Park, Little League parking lot and park improvements, a dump truck and a leaf vacuum truck.