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The City of Orange is proposing a .0375% increase to its tax rate along with several other changes to keep the city’s finances afloat and balance revenue losses.
The tax rate increase and a slight hike to water bills were all among the proposed changes presented at Monday evening’s budget workshop. The proposed budget also includes a 2% raise for all city employees which will be partially funded by changes to employer insurance contributions for employees with dependents.
“This is the year where we hold tight,” Orange Mayor Larry Spears Jr. said. “There’s been times in my household I’ve had to tell my wife and kids, ‘It’s not going to be like it was last month,’ or ‘It’s not going to be like Christmas last year.’
“If we’re in a situation like that, I want you to understand that there’s nobody up here that’s trying to take anything out of your mouth, out of your pockets, or out of your family’s health insurance or anything like that, until we can figure it out or get the community to get back behind us.”
Orange City Manager Mike Kunst gave a lengthy presentation at the budget workshop explaining potential changes to the city’s general fund, as well as the water and sewer fund.
Kunst said the general fund’s revenues are expected to fall short of original estimations for the 2024 fiscal year by around $2.8 million. There are two reasons for the low revenues.
The city originally projected 2024 sales tax revenues to total around $5.75 million. However, the actual estimate with six weeks remaining is expected to hover around the $4.7 million mark.
In addition to lower sales tax revenues, the City of Orange will also be losing payments in lieu of taxation (PILOT payments) from the Invista and International Paper facilities, both of which are expected to, or already have, ceased operations. These PILOT payments totaled nearly $1.8 million.
The proposed budget changes are intended to make up for these losses in order to keep the city’s pocketbook balanced. The main change is a proposed tax rate for fiscal year 2025 of .797%. This is a .0375% increase from 2024’s tax rate of .7595%.
The city will hold a public hearing on this proposed tax rate at 5:30 p.m. Sept. 3. It will take place in the auditorium of the Orange Public Library.
As for the water and sewer portion of the workshop, the proposed budget includes a $0.25 base bill increase and a $0.03 per gallon increase for water, with a $1.98 increase for Waste Management by contract.
Additionally, several departments across the City of Orange have been asked to limit their requests for funding and other projects in order to further cut back.
Aside from the changes intended to counteract lost revenues, the city’s proposed budget includes a 2% raise across the board for its 210 employees. This will cost an estimated $333 thousand. No new positions will be created.
Much of the funding for raises is proposed to come from changes to employer insurance contributions.
The city currently pays 90% of the insurance coverage for all employees’ dependents with a $3000 premium. The proposed budget will reduce this figure to 85% with a $2000 premium and 80% with a $1000 premium. The tweaks to this employer contribution split could save the city up to $140 thousand.
The post ‘We’re treading water’: Orange trying to balance revenue loss with proposed budget changes appeared first on Orange Leader .
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