Graham council approves budget, 3-cent tax hike after debate

A 3-cent property tax hike will add about $60 a year to a $200,000 Graham home, and the narrow 3-2 vote that approved it showed how sharply the council is split over who should pay for the city’s growth. The budget also carries higher water and sewer fees, making the final package a direct cost increase for homeowners and a warning sign for builders facing steeper development charges.

Council members Bobby Chin, Ricky Hall and Bonnie Whitaker voted for the budget, while Mayor Chelsea Dickey and Councilman Jim Young opposed it. Young said he could not support raising taxes in the current economic climate, while Dickey’s objections centered more on the fee schedule that accompanied the budget than on the tax rate itself.

The plan raises Graham’s property-tax rate by 3 cents to 33.99 cents per $100 of valuation. That increase is tied to roughly $22 million in capital projects over five years, a list that includes a $6 million fire substation in the southern part of the city, a $1 million fire truck, $3.75 million for street resurfacing and $4.1 million to design the next phase of Graham Regional Park. City officials also plan to move $3.1 million from a non-departmental general-fund account into a capital reserve fund to help cover those projects.

The 2026-27 budget totals $44 million, up $8.2 million from the $35.8 million budget then in place. Davenport Public Finance consultant Ted Cole told the council that the $22 million capital plan required a 2.79-cent tax increase, which is why Hall pushed to round it to 3 cents. The vote came just days before the city’s fiscal year begins July 1.

Fee changes were the other flashpoint. City Manager Megan Garner had proposed a 6% increase in water and sewer rates after a 4% increase in the prior year, along with a jump in garbage and recycling fees from $14.50 to $16.50 per rolling can each month. Two developers who spoke at the hearing argued that the higher water and sewer charges would hit new construction hardest and should have been phased in instead of adopted all at once, saying the added costs would be passed on to future homeowners.

Supporters said Graham had undercharged for years and was finally catching up on costs that had been delayed too long. Critics warned that the timing was poor and that the city’s push for stronger cost recovery would make housing more expensive in a market already under strain. The split vote leaves Chin, Hall and Whitaker owning a budget that favors capital spending and fee increases, while Dickey and Young are now on record against the city’s direction on taxes and growth costs.

The 2026 vote also marks a sharp turn from 2025, when Graham approved a 2-cent tax increase on a 4-1 vote. That earlier $22.7 million budget added five employees, gave all employees a 3% cost-of-living raise, raised water and sewer rates by 4% and increased garbage and recycling fees by $1 a month.