Durham's proposed 2026-2027 city budget keeps the property tax rate flat despite a revenue shortfall that City Manager Bo Ferguson called a "difficult reset." He presented the plan to Durham City Council on Monday night.
The total budget comes in at $766 million, about $40 million more than last fiscal year. The core operating budget, though, shrank by roughly $500,000. Ferguson traced the squeeze to $9 million in property tax refunds the city had to issue after a surge of appeals following last year's countywide revaluation. He expects the hit to be one-time.
To close the gap, the city trimmed $7.3 million in operating expenses and is eliminating nine positions, four of which were already vacant. Thin slice of a nearly 3,000-person workforce.
Not everything shrinks. The budget includes a 2% pay scale adjustment for all city employees and fully funds the Durham Minimum Livable Wage, which jumps 14% to $25.09 per hour. Fare-free public transit continues. Water and sewer customers will see about a 12% average rate increase, driven by higher chemical costs and capital needs. Stormwater and parking rates hold steady.
"This budget required difficult choices, but we are staying focused, staying disciplined, and moving forward together," Ferguson said. "We are investing in public safety, advancing a reimagined homelessness response, caring for our employees, providing fare-free public transit, protecting essential services, and delivering critical infrastructure all without a property tax increase."
The proposal lands as Durham County separately weighs a 2-cent property tax hike in its own $1.045 billion budget to cover slowing commercial revenue and school funding gaps.
The city holds budget work sessions May 27 and 28, followed by a public hearing June 1. Residents can watch all three live on the City of Durham's YouTube channel.