Matthews unveils $37.6M budget with tax increase for 2026

The Town of Matthews Board of Commissioners convened Monday evening for a special session to unveil the proposed budget for fiscal year 2026. Town Manager Becky Hawke presented the $37.6 million spending plan, which includes a property tax increase, expanded employee compensation, and targeted investments in infrastructure and public services.

The proposed budget reflects a $1.6 million increase over the previous year, driven largely by personnel costs and inflationary pressures on operations and utilities.

The budget includes a 1.3-cent increase to the property tax rate, raising it from 26.65 to 27.95 cents per $100 of assessed value. Hawke emphasized that the increase is directly tied to debt service on the $1 million general obligation bond issued earlier this year, primarily for the development of Perholy Park.

For the average Matthews homeowner, with a property valued at $429,000, the increase translates to an additional $55.81 annually, or about $4.65 per month.

A central theme of the budget is employee recruitment and retention. The proposal includes a 3% cost-of-living adjustment (COLA) and a separate 3% merit-based raise pool for town employees. The combined compensation package is expected to cost approximately $1.1 million, including fringe benefits.

“We are committed to maintaining market competitiveness,” Hawke said, noting that the town’s ability to attract and retain qualified staff is essential to service delivery.

Residents will also see an increase in stormwater fees, averaging $212 per household annually. The increase, approved by the board in February, is intended to restore funding levels for maintenance and repairs, not to expand services.

Utility costs are also on the rise. The town anticipates a $60,000 increase in street lighting expenses and a 41% spike in electricity costs for municipal buildings. Solid waste services will cost an additional $141,000 due to contractual CPI escalators.

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The budget allocates $729,000 for capital outlay and over $1 million for capital improvement projects. These include ADA sidewalk upgrades, vehicle replacements, and facility maintenance. A new Vision Zero Action Plan is also funded, with $50,000 earmarked for traffic calming and pedestrian safety initiatives.

Notably, stormwater operations will now be tracked in a separate fund for greater transparency.

While the budget maintains a healthy fund balance, some commissioners questioned whether the tax increase could be avoided. Commissioner Larry Whitley requested an alternative version of the budget without the tax hike, citing the cumulative burden on residents from stormwater fees and county revaluations.

Hawke responded that while technically possible, using fund balance for recurring expenses would be fiscally irresponsible. “It would delay the inevitable by a year,” she said, adding that the bond-funded projects were approved by voters with the understanding that taxes would rise to support them.

The budget does not include funding for the proposed park at McKee and Pleasant Plains or for Veterans Memorial Park improvements. However, nearly $1 million remains available in the Windsor Run fund for future park development, and tourism funds could support the Veterans Park project if the board chooses to move forward.

The board will hold additional budget workshops in the coming weeks. A final vote is expected before the start of the new fiscal year on July 1.