Mayor Esther Manheimer counsels councilmembers that every tack-on expenditure will require a revenue stream. Screenshot.
Asheville – On July 23, the Asheville City Council finalized the amounts they wish to allocate for specific categories under the General Obligation Bonds (GOBs). Voters will determine whether to fund the city’s priorities in a bond referendum on the November ballots. Mayor Esther Manheimer previously noted that bond referenda rarely fail.
One reason for this is that, although elected officials and city staff are prohibited from advocating for the bonds, they are ensuring that advocacy occurs. Budget Director Tony McDowell stated, “Staff are reaching out to outside groups like the Chamber [of Commerce] to request assistance with bond advocacy.”
The referendum seeks $20 million in each of four categories, with the council only able to suggest “possible projects.” McDowell explained that floating $80 million in bonds would result in a 2.6-cent increase per $100 valuation in the tax rate.
Possible projects in the Affordable Housing category include contributions to the Affordable Housing Trust Fund, leveraging funding revenues, acquiring affordable housing, subsidizing predevelopment for smaller developers, and providing grants to incumbent homeowners. Transportation projects may involve street resurfacing, ADA improvements for sidewalks, and greenway design and construction.
Parks and Recreation projects could encompass upgrades to community centers and pools, as well as the construction of pickleball courts. Potential uses for Public Safety Facilities funds include upgrades to the Municipal Building, which Manheimer described as decrepit, and the design or construction of three new fire stations.
Additionally, the city is pursuing $10 million in Limited Obligation Bonds (LOBs). LOBs do not require referenda, and examples of their potential use include replacing the roofs of the Municipal Building and several community centers, upgrading HVAC systems in various buildings, including City Hall, and providing or replacing generators in multiple facilities, including City Hall.
The LOBs would add another 0.3 cents to the tax rate. To illustrate the household impact of all bond proposals on the table, McDowell began with the average residential property value of $350,788, applied an estimated 20% increase for the upcoming revaluation, and calculated an average cost of $122 per household.
In June, the city approved a 0.63-cent tax increase, equating to $22 on the average household tax bill, to balance its $250 million budget. This decision followed a drawdown of $7.75 million from the fund balance, leaving it below the council’s self-imposed lower limit of 15% of the general fund. Despite the controversial activities of the city that extend beyond basic services, the increase was framed as a response to firefighters’ demands for competitive pay. The city’s $250.9 million budget for 2025 has a tax rate of 40.93 cents.
While it will take a few months to determine how accurate McDowell’s projected 20% revaluation increase proves to be, the county also had to raise taxes this year. A 0.75-cent increase for education contributed to the county’s overall 1.96-cent increase. The county’s $626.4 million budget for 2025 has a tax rate of 51.76 cents.
Furthermore, property owners in Downtown Asheville will be subject to a new Business Improvement District (BID) tax at a rate of 8.77 cents per $100 valuation. Efforts to establish a BID have been underway for a couple of decades. This year, they likely succeeded due to widespread complaints about filth and aggressive panhandling. Reports indicated that crime was rising, leading employees and customers to feel unsafe traveling to and from businesses. With higher priorities elsewhere, proprietors lobbied the council to create a revenue stream dedicated to basic city services.
The BID is intended to maintain cleanup crews and deploy “ambassadors” on the streets to deter and report crime. BIDs in other municipalities have been known to hang celebration banners on light posts and invest in public art. A survey is currently available at publicinput.com/bidsurvey, asking respondents what they want from the BID. Options include connecting street individuals with agencies, sanitizing benches and bike racks, collecting needles, removing graffiti, decorating public spaces, and hosting events.
The city’s BID page states, “Recognizing there are direct costs to property owners and indirect costs to people who rent, lease, or spend money downtown, the survey is open to all residents.” The city indicates that responses will be used to “inform” the RFP it will develop to select a provider for BID services.
Reasons cited for all tax increases include overall inflation and sluggish sales tax growth. Some members of the Asheville City Council had hoped to secure funds from the Tourism Development Authority for affordable housing; however, the legislature denied that request, and the TDA is now projecting flat revenues for the second consecutive year.