Manager Ellis recommends $2.28 billion budget for Fiscal Year 2027
Proposal shows property tax rate would be 19 cents lower
if Wake County didn’t have to fund state obligations
Wake County Manager David Ellis presented on May 4 a nearly $2.3 billion budget proposal for Fiscal Year 2027, which runs from July 1, 2026–June 30, 2027. He told the Wake County Board of Commissioners that the N.C. General Assembly is chronically underfunding education, public safety and human services, leaving Wake County to stand in the financial gap.
“In the FY2026 budget alone, Wake County could have saved $600 million and lowered the property tax rate by 19 cents if we hadn’t had to plug the financial holes left by the state,” said Manager Ellis. “The owner of a $450,000 home would have seen a reduction of nearly $900 on their property tax bill if the state had met its fiscal responsibilities.”
State Subsidies
In his presentation, Manager Ellis provided the following examples of where the state is not fulfilling its funding obligations:
- Wake County Public Schools – Wake County could have saved nearly $530 million and avoided a property tax increase in the FY2026 budget if the state had stepped up and fully funded K–12 education.
- State prisoners in county custody – The Wake County Detention Center routinely houses more than 100 inmates who should be in state custody. Due to staffing shortages, the state prisons can’t house them, so they remain in county custody, costing about $3 million annually.
- Foster youth living in our office building – Because the state is not providing adequate placement for foster youth with complex needs, Wake County is spending $9 million to buy, renovate and staff a facility where they can stay. It will have more appropriate amenities that mirror the feel of a real home.
Revenue Shortfall
Every dollar Wake County invests is critical in FY2027 because our property tax revenue is falling far short of projections. The county has come to expect the property tax to generate $40 million–$50 million in new revenue annually from natural growth in the tax base. In FY2027, estimates show it will plummet to $8 million.
There are two main reasons why:
- More appeals to the N.C. Property Tax Commission – In our most recent revaluation cycle, 1,500 property owners appealed their appraisals to the state, which is more than Wake County has ever seen. Most of the tax value under appeal is in commercial properties, which have trended down in value. As of May, 750 of those appeals remain open, leaving a large amount of our tax base undetermined. Overall, staff estimate a cumulative revenue loss of $18 million in FY2027 from appeals.
- Blue Ridge Housing Loophole – State law allows nonprofits that provide housing to residents with low or moderate incomes to be exempt from paying property taxes. However, the law is ambiguous and does not clearly define “low” or “moderate income.” This lack of clarity has allowed the courts to give for-profit companies across the state like Blue Ridge Housing a property tax exemption even though its nonprofit partner only comprised 0.1% ownership of the apartment complex. Wake County expects to lose $12.3 million to this loophole in FY2027.
The Wake County Commission applauds efforts by some state lawmakers to clarify the statute and close the loophole. Our Board has also recently passed a resolution formally opposing a push at the state level to cap property tax increases.
“Local leaders should maintain control over local budgets,” said Board Chair Don Mial. “If we lose the authority to set our own tax rate, we may have to significantly reduce our services and scale back much-needed capital improvement plans. That’s not what’s best for our growing community.”
Investments in Public Safety
Manager Ellis is focused on enhancing public safety in the FY2027 budget. He proposes using the $8 million in new property tax revenue to:
- Add 16 new EMT positions to Wake County EMS to address the increase in 911 calls for emergency medical care.
- Use county funds to support the Fire Services training manager position, which oversees recruitment and training of new firefighters. The role was previously funded with federal dollars that will no longer be available after December 2026.
- Reopen the jail annex to accommodate growth in the inmate population and add 92 new detention positions to the Wake County Sheriff’s Office to safely staff the facility.
Education
Funding education is a significant part of the recommended budget. Manager Ellis proposes the following investments:
- $25.3 million to fully fund Superintendent Taylor’s request for the Wake County Public School System. This is in addition to the $743 million the county provided WCPSS in FY2026 for facility maintenance and operations.
- $1.8 million to Wake Technical Community College to support facility maintenance, pay IT and administrative staff and cover rising utility costs. These additional funds are on top of the $42 million the county provided Wake Tech in FY2026 for building upkeep and operating expenses.
- $2 million to Wake County Smart Start to add 50 new seats to Wake ThreeSchool for 3-year-olds while continuing to support Pre-K for 4-year-olds who meet income requirements. These dollars would be in addition to the $8 million the county invested in Smart Start in FY2026.
In all, this budget would invest $823 million in education for operating expenses. About 65% of that is directly due to a lack of financial support from the state.
The Budget Picture
The proposed FY2027 budget totals $2,282,021,000. It includes a 2-cent property tax increase, which would raise the property tax rate to 53.71 cents and generate an additional $62 million. The owner of a $450,000 home would see a $90 increase in their tax bill.
This budget accounts for rising costs that stem from federal decisions, including the conflict in Iran and tariffs on foreign goods. It also subsidizes areas where state funding continues to fall short. If the county didn’t have to step up and support education, social services and public safety, our property tax rate would be around 30 cents.
Next Steps
Public feedback is an important part of the budget development process. Starting tonight, residents can submit comments via our website. The opportunity to share feedback closes on May 20 at noon.
Other important dates include:
Monday, May 11
- 2 p.m. – First budget work session held at the Wake County Justice Center.
- 7 p.m. – First budget public hearing held at the Wake County Commons Building.
Monday, May 18
- 2 p.m. – Second budget public hearing held during the Board’s regular meeting at the Wake County Justice Center.
Thursday, May 21
- 9 a.m. – Second budget work session held at the Wake County Justice Center.
Monday, June 1
- 5 p.m. – Board votes on the proposed budget during its regular meeting held at the Wake County Justice Center.