Davidson residents will have to pay a new $5 annual fee for each car they own beginning this fall, under a new ordinance adopted by the Town Board Tuesday.

The board approved the new fee – known as a “motor vehicle privilege tax” – with little discussion during its monthly meeting, which also included a public hearing on the proposed 2007-2008 budget.

The headline on the new budget, first presented to the board last month, is that it does not raise property taxes. It also marks the first time that the town’s tax base – the total value of all taxable property – is expected to top $1 billion.

At an April 24 town board work session on the budget, Town Manager Leamon Brice proposed the vehicle fee as a way of expanding next year’s budget slightly without raising property taxes.

Other towns in the area have also adopted vehicle user fees. The $5 per car fee is the maximum allowed by state law. Mr. Brice said it would raise about $30,000 a year for the town. First-year income in 2007-2008 would be slightly smaller – about $22,500, Mr. Brice said – because revenues would not start coming in until October.

Mecklenburg County will collect the fee on the town’s behalf.

On Tuesday, Mr. Brice said he plans to set aside the revenue from the new fee as a contingency fund. The town keeps a “rainy day” fund for unanticipated expenses, but that fund is below where Mr. Brice would like because of unexpected capital expenses, he said.

BUDGET HIGHLIGHTS

At the start of the budget hearing, Mr. Brice outlined his plan for 2007-2008, which totals about $7 million. The new budget year begins July 1.

“I guess the first thing is the good news. We’re not raising taxes this year,” Mr. Brice said.

He said the tax base is now over $1 billion for the first time. Mr. Brice said 54 percent of the town’s revenues come from property taxes.

As Mr. Brice said at last month’s town board work session, the town will be unable to fund a number of projects on its wish list, as it tries to keep the budget in balance. Not funded, among other things, were a new police officer position, a new public works truck, traffic calming, renovations to town hall, a medic van, a new speed trailer and two planning studies.

The budget does include money for a new fire truck, a full-year’s funding for part-time paid firefighters to ensure weekday coverage, a major overhaul to the town website, a small-area plan for Davidson-Concord Road, and a townwide open space plan.

The budget calls for a 2.5 percent cost of living pay increase and a 1 percent pool for merit pay raises for town employees.

The draft budget is available on the town Website. It will come up for a vote at the June Town Board meeting.

LINKS

April 25, 2007, Davidson News & Notes, “Budget would keep 2008 taxes flat”

March 22, 2007, Davidson News & Notes, “Town hires its first part-time firefighters”