Durham County is facing significant budgetary challenges as it prepares for the 2025-2026 fiscal year, with a proposed budget exceeding $1 billion. During the recent Budget Work Session held on May 20, 2025, county officials outlined the financial landscape, highlighting a projected increase in expenditures that outpaces revenue growth.

The general fund, which constitutes 95% of the county's operations, is set at $688 million. However, the county anticipates only $15.3 million in new revenue, necessitating a proposed 3.5-cent increase in the property tax rate to bridge a substantial funding gap. This increase is expected to generate approximately $29.9 million, which will help address rising costs in public safety, employee benefits, and capital projects.

Key drivers of increased expenditures include a $10.35 million funding boost for Durham Public Schools and a $6.3 million rise in employee benefits. The county is also grappling with a decline in sales tax revenue, which has dropped by $1.23 million due to changes in state law and economic factors. This decline is compounded by a projected loss of occupancy tax revenue, which is expected to reach zero in the coming years.

County officials emphasized the importance of maintaining fiscal stability amid these challenges. A hiring freeze on non-essential positions has been implemented, and departments have been asked to limit budget requests. The county's fund balance, which serves as a financial cushion, has decreased, prompting a cautious approach to future spending.

As the budget process continues, county leaders are focused on reallocating existing resources and ensuring that essential services remain funded. The proposed budget reflects a commitment to addressing community needs while navigating a complex financial environment. The next steps will involve further discussions and adjustments as the county seeks to balance its fiscal responsibilities with the demands of its residents.