Johnston County Proposed Budget Avoids Tax Increase But Relies On Reserves

SMITHFIELD, N.C. – Johnston County residents would avoid a property tax increase under a proposed 2026-27 budget unveiled Monday, but the spending plan would rely on millions from reserves, postpone dozens of requested positions and introduce higher utility and landfill fees as county leaders attempt to manage mounting costs tied to rapid growth.

County Manager Rick Hester presented a proposed $421.9 million General Fund budget that keeps the county property tax rate at 52 cents per $100 valuation. The countywide fire tax rate would also remain unchanged at 11.5 cents per $100 valuation.

The proposed budget represents a 2.2 percent increase over the current fiscal year.

Although county officials highlighted the decision to hold the tax rate steady, the proposal depends on an $8.7 million transfer from General Fund reserves to balance the budget — a move that comes as Johnston County continues facing rising operational costs, debt obligations and demands for expanded public services.

“But it’s possible we won’t need that money,” Hester said. “Historically, the County has annual savings from operations — job vacancies as an example of savings — which might allow us to keep most or all of that $8.7 million in reserves.”

The proposal comes as Johnston County continues experiencing significant population growth, placing additional strain on schools, emergency services, infrastructure and public utilities.

Some of the increased spending stems from new debt payments tied to the Clayton High School rebuild and voter-approved bond projects for Johnston County Public Schools and Johnston Community College.

“We’re also seeing continued pressure from rising health insurance costs,” Hester said.

Education remains one of the largest portions of county spending in the proposal. The budget includes $113 million for Johnston County Public Schools operations and another $3.5 million for school capital needs. Johnston Community College would receive just over $10 million for operations and $1.2 million for capital.

Despite the county’s continued growth, the proposed budget pauses requests for 28 new tax-funded positions across several departments, including Emergency Services, 911 Communications and the Sheriff’s Office.

The delayed positions highlight the financial balancing act facing county leaders as demands for public services continue to increase.

“However, I do recommend moving forward with four new positions in Public Utilities, since that department gets its funding from water and sewer customers, not taxpayers,” Hester said. “We would propose to begin filling those four positions in October.”

Residents could still see increased costs elsewhere.

The proposal includes planned increases in water and sewer rates, though county officials have not yet publicly detailed the scope of those increases. Hester also recommended raising landfill tipping fees from $48 to $50 per ton while keeping county convenience sites free for residents.

The proposed budget additionally includes funding for employee pay raises and salary adjustments tied to a compensation study intended to help the county remain competitive in hiring and retention.

“I’ll present a specific recommendation to the Board of Commissioners in the coming weeks,” Hester said regarding employee raises. “Also, in keeping with a pay study, I have included dollars for those cases where we need to raise salaries to remain competitive in the marketplace.”

While the proposal avoids a tax increase this year, the combination of reserve spending, delayed staffing requests and rising service fees suggests county officials are attempting to manage growing financial pressures without placing additional burden on property owners ahead of another year of expansion.

Commissioners are expected to continue budget discussions during meetings on June 1 and June 15. A public hearing on the proposed budget is scheduled for 10 a.m. June 1.

“Overall, this budget reflects our commitment to financial stewardship while continuing to meet the needs of a growing county,” Hester said.