But Orange County's budget director said Friday she doesn't think she can avoid recommending at least a $1 per $100 valuation tax rate next week when the county presents its recommended budget.

"We're only a nickel away from being a dollar," director Donna Coffey said of the Orange County tax rate, which now stands at 95 cents per $100 of assessed property value.

Why are taxes going up?

Several factors are sending the tax rate up.

Nearly 70 percent of the county's general fund revenue comes from property taxes. But home sales and construction are sluggish, and budgeted taxable property is projected to grow just 2.3 percent over the current fiscal year.

With gas at nearly $4 per gallon, consumers are spending less. Orange County has collected $12.5 million in sales tax, compared with a targeted $13.5 million for this point in the year.

Changes in sales tax distribution also are hurting. The state is picking up county governments' share of Medicaid spending, Coffey said. But at the same time, it's keeping a portion of sales tax collections that used to go to counties.

School board requests

Orange County has two school systems.

If the Orange County Board of Commissioners were to fully fund the Chapel Hill-Carrboro City Schools budget request from the countywide property tax, it would have have to raise the tax rate nearly 8.4 cents.

If the county were to fully fund the smaller Orange County Schools budget request, the county-wide property tax rate would have to rise 4.25 cents per $100 valuation.

Under the latter scenario, the county could meet the rest of the Chapel Hill-Carrboro request by increasing that school system's special district tax.

The rest of the county

The county makes up just a portion -- the biggest portion -- of Orange County tax bills.

Chapel Hill's town manager has recommended an 11.3 percent tax rate increase. Carrboro's has recommended a 4.9 percent increase. Hillsborough's has recommended a 5.5 percent increase.

Barry Jacobs, a writer and chairman of the Orange County Board of Commissioners, doesn't want the county tax rate to go past 99.9 cents per $100 valuation.

He expects next week's recommended increase to be higher.

Just paying the debt on recent construction, the added costs of a new middle school and additional grade at the new high school, and the county's contribution to the new Durham Technical Community College campus will require $6 million or $7 million, he said -- enough to reach his ceiling.

"That doesn't talk about fuel increases, insurance, fully funding the schools' requests," he added. "There is no easy answer."

What's next?

If Orange County does reach the $1 per $100 mark, it won't be there for long.

Next year is a revaluation year. When assessed property values go up, the tax rate goes down, at least initially. The county sets a revenue neutral rate, or the amount needed to generate the same amount of income, and starts the budget process from there.

Tax Assessor John Smith says property owners will get notices of their new assessments in late December and early January.

Based on recent homes sales, he expects most properties to rise 20 to 30 percent in value.