Durham City Council held its first FY27 budget work session, wrestling with a $13 million revenue shortfall caused by record property tax appeals and the elimination of employee pay-for-performance raises.
Four converging pressures — record property-tax appeals, slowing sales tax, rising health and retirement costs, and inflation — forced a constrained $326M general fund budget with no tax-rate increase and deep departmental cuts.
To avoid a tax increase or core-service cuts, staff proposed replacing the step-increase pay-for-performance system with a flat 2% structure adjustment, saving roughly $6M, while setting the Durham minimum livable wage at $25.09 per hour.
Durham County Tax Administrator Kiard Doyle detailed how a 2025 reappraisal following six years of market growth generated more than triple the typical appeal volume; commercial properties drove the bulk of the resulting $3.1 billion assessed-value reduction.
Staff presented a newly expanded 10-year capital improvement plan prioritizing project completion, infrastructure maintenance, and safety upgrades, while the City Manager acknowledged the constrained plan leaves significant unfunded needs that may require a future bond conversation.
With an RFP already on the street, Human Resources described a classification and compensation study aimed at addressing pay-plan sustainability, equity, and market competitiveness — and avoiding the large periodic corrections the city has experienced in recent years.