Nags Head’s new budget includes a 1-cent tax increase

By on June 18, 2019

 Nags Head’s budget for the fiscal year that begins July first includes a property tax increase of 1-cent per $100 value and projects another possible hike of 1 cent next year.

Count your Starbucks: A 1-cent increase comes out to $30 a year, or $2.50 a month, on a $300,000 house.

Here’s the town’s recap of the budget:

At their June 5, 2019 meeting, Nags Head’s Board of Commissioners adopted a balanced budget for July 1, 2019 through June 30, 2020, as well as a financial plan for 2020-2021, with commitments to fiscal responsibility, long-term sustainability, and quality of life improvements.

Major highlights of the Fiscal Year 2019-2020 budget include:

Beach Nourishment — The coming year represents the first payments on the Town’s beach nourishment special obligation bonds at $3,049,248, as well as the first year of Dare County’s first debt supplement made to the Town toward the bonds at $600,000.

Stormwater — The Stormwater budget of $470,800 is funded by the dedication of two cents of the town’s tax rate. As part of the Town’s work to implement a stormwater master plan, specific capital projects have been adopted to address chronic drainage issues.

In Fiscal Year 2018-2019, three of these projects were implemented: Gallery Row/Red Drum, South Virginia Dare Trail/Village at Nags Head, and Nags Head Acres. The second of five annual debt payments at $139,426 is included for these projects. For Fiscal Year 2019-2020, improvements are planned in the areas of Old Nags Head Cove (Kipper Court) and two areas in South Nags Head along SR 1243.

We are also continuing planning efforts for an innovative drainage project around Wrightsville Avenue near Nags Head Elementary School. Funds are currently in place to initiate survey, design, permitting, bidding, and construction administration associated with these projects. The North Carolina Department of Transportation has also committed to providing $100,000 towards the construction of the two south Nags Head projects.

Parks and Paths — The final phase of improvements to Dowdy Park include the addition of solar lighting, an observation/exercise deck near the playground area, and one additional pathway on the west side of the playing field. Funding also includes the extension of the multi-use path south of Jockey’s Ridge, serving the following neighborhoods: Soundside Road, Southridge, Old Nags Head Cove, the south end of the Village at Nags Head, and Roanoke Shores. This will also connect to the Soundside event site and the traffic light at Gull Street, which will allow pedestrians to safely cross and access the Whalebone Junction area.

The remainder of the parks and paths capital reserve fund will be dedicated to South Virginia Dare Trail multi-use-path repairs at $25,000.

Recycling –The seasonal recycling collection service contract has been renewed, ensuring the Town will not be susceptible to increasing costs related to recycling for the next three years. In addition, the service has been expanded for properties on South Virginia Dare Trail and South Old Oregon Inlet Road and the collection schedule has been improved to be more intuitive for visitors.

New Positions — A water plant operator is included in this budget, as well as funding for a facilities maintenance stormwater technician, who will assist in the more aggressive stormwater/drainage system maintenance plan.
Employees–Nags Head’s Board believes that employees are the Town’s greatest asset and the new budget demonstrates a commitment to staff through:

  • A 1.6% cost-of-living adjustment
  • Within-grade increases to allow employees to advance within their salary ranges
  • Merit bonuses for employees with exceptional performance
  • Funding to implement changes to the Police and Fire Departmental Career Progression program
  • A $1/hour increase to seasonal lifeguard pay to stay competitive in our area

The total budget of $38,220,130 includes a one cent increase to property taxes, bringing the town-wide tax rate from $.307 to $.317 per $100 of assessed value. There is no change to the $0.175 beach nourishment tax rate in Nags Head’s two municipal service districts or the $0.027 town-wide beach nourishment tax rate. As of May 28, 2019, the fiscal year 2018-2019 tax collection rate for the entire town is 99.98%, while the collection rate for the municipal service districts is 100%.

In continuation of water rate planning and analysis as recommended by the North Carolina Rural Water Association, a 15% water rate increase to the minimum and commodity rates is included to meet operating and debt service costs. Future water rates will be evaluated and recommended to provide sufficient revenues to meet or exceed operations and capital project improvements.

Basic fees for building permits have not increased in close to 20 years. In that timeframe, the Town has experienced increases in administrative costs, along with changes in development, and the addition of new responsibilities to our permitting functions. Fees for new construction for residential projects are increasing from $0.50 to $0.75/square foot for heated space and $0.25 to $0.40/square foot for unheated space. Fees for commercial projects are increasing from $0.60 to $0.80/square foot for heated space and from $0.40 to $0.80/square foot for unheated space. Also, fees for additions, based on valuation, will increase by $25 for each step in the current range of valuations. For example, the minimum permit fee will increase from $75 to $100 for jobs costing between $0 and $2,500. Jobs costing between $2,501 and $5,000 will increase from $105 to $130.

Given the reduction in the Town’s water system development fees in last year’s budget, many projects will still realize an overall decrease in permit fees from prior to July 1, 2018.

Looking ahead, the Town’s 2020-2021 financial plan projects a possible one cent town-wide tax and no increase to water rates.

The adopted budget will soon be available on the Town’s web site at

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