Dwindling revenue sources and increasing service needs put Durham County Manager Claudia Hager and her staff between a rock and a hard place as budget season ramped up at Monday night’s county commissioners meeting.
“Durham County is navigating a new and challenging environment,” Hager said during her presentation for the proposed 2026-2027 fiscal year budget.
With limited funding options available, Hager is proposing a 2¢ property tax increase and a Durham Public Schools budget increase that’s less than half of what the district asked for.
“The proposed budget continues a delicate balancing act between limited resources, resident economic stress and nearly infinite needs,” Hager said
Hager’s total budget proposal comes in at $1.045 billion, a marginal 0.67% increase from the current year’s budget, which eclipsed the billion dollar mark for the first time in the county’s history due in part to a growing population of taxpayers. The county is experiencing significant stagnation in “natural” revenue growth—new revenue without a property tax increase—starting the 2026-2027 budget process with less than $1 million in added revenue, compared to the $68 million in new funding requests from various county departments.
“Nearly all of those funding requests were ultimately not able to be supported,” Hager’s proposed budget reads. In an effort to close the remaining gap, departments made $6 million in cuts to focus on funding basic needs, and the proposed property tax increase would generate an additional $17.6 million in revenue.
Uncertainties at every level of government make this year’s budget negotiations more difficult to balance. Inflation and rising gas prices are driving up everyday costs, and the state legislature has not passed a budget in over two years, straining local government services that are partially funded by the state, none more than public education.
Education remains the county’s biggest expenditure, which includes funding for Durham Public Schools (DPS) and Durham Technical Community College. During a school board meeting in March, the DPS Board of Education set its budget request at a massive $28.5 million increase compared to last year. The Durham Association of Educators, the district’s majority-member union, is pushing the school board and the county to invest in classroom equipment and a higher minimum wage, not to mention building improvements, among other things. County commissioners and staff have said the request is untenable due to the myriad of other budget demands.
Hager still recommended a nearly $11 million increase in funding for DPS over the current year’s budget, bringing the total county funding for public schools to $235,428,901. An additional $1.27 million was recommended for Pre-K funding.
“While we have made substantial progress with these funds, I am aware of the remaining funding gaps within the district,” Hager said. “But there are also limits to what the county can annually fund for DPS without either significantly limiting available resources for other county services or needing to increase the property tax rate every year.”
Public education relies on an increasing proportion of its funding from the county; for six straight years, the county has increased school funding by over $10 million. Advocates say the state legislature continues to underfund public schools, forcing the county to fill in the gaps for things like teacher wages and other programs.
DAE doesn’t seem to be dropping its push for higher wages. Later this week, the group is holding a living wage town hall at Northstar Church of the Arts to further voice their position to the county commissioners.
“In order to win funding from the county, we need to stand united and let the County Commissioners know that this step towards a living wage for DPS workers can’t wait another year,” the group posted on social media.
Without more financial support from the state and federal government, the county has limited options for bolstering its coffers. Hager said raising taxes this year could alleviate some of the county’s revenue woes—each 1 cent per $100 of assessed value would raise about $8.8 million—but residents are already feeling squeezed by property tax increases. Last year, the county lowered the property tax rate from 79 cents to 55.42 cents to mitigate a spike in tax bills that occurred following a county-wide property revaluation. The county tax administration office saw a higher-than-usual number of appeals of those newly assessed values this year, many from commercial properties, which had an adverse impact on the county’s revenue.
“I would like to remind the board and residents that the property tax rate is the primary revenue source controlled by the board, and it is the only significant way to raise additional revenue to address pressing needs,” Hager said.
The state legislature could wrangle that control away from county governments across North Carolina. The Republican-led state House recently proposed a constitutional amendment to limit the ability for local governments to raise property taxes, which would further hinder how counties generate revenue.
In addition to investments in education and public safety, the recommended budget includes half a million dollars to support a joint city-county Homeless Strategic Plan, and $250,000 for a Violence Reduction Plan.
Hager also said the county plans to make improvements in transportation by expanding travel options with programs like Central Bus Rapid Transit.
The public will have the opportunity to raise its own two cents at the May 26 budget public hearing. The county commissioners are scheduled to vote to approve the 2026-27 fiscal year budget on June 8.
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