*This letter was emailed from Chamber President and CEO Aaron Nelson to the Chapel Hill Town Council on Tuesday, May 18, 2021 to help frame their budget discussion. 

Dear Chapel Hill Town Council,

On behalf of The Chamber, representing more than 700 employers many of whom are local businesses, we ask that you consider the following in your budget discussions: 

• (Small Business Pain Points) As you know, in most retail and restaurant lease terms, the tenant is responsible for paying the property taxes. Many small, local businesses are still reeling from the lock-down, are saddled with an increased debt load, managing major revenue losses, and now scraping together the necessary salaries to secure workers for the start of a post-pandemic economy. Indeed, the timing of a tax increase is very difficult for your local businesses.
  
  
• (Revaluation Commercial Impacts) While the increase in value of commercial property has long-term implications worth celebrating, it comes with acute, negative short-term impacts. In this revaluation, commercial properties more than residential will feel the immediate effects with the tax bill including both the effects of increased value, compounded by any tax increase. Even a revenue neutral tax rate will result in many local businesses paying more and an increase above neutral rate will add additional costs to operating a Chapel Hill business.
  
  
• (Economic Development Dividend) As a Council, you have made wise economic development decisions in recent years, and those are bearing fruit. We encourage you to rely on the benefits of new commercial and residential development, increased commercial property value, and increased commercial taxes as your source for increased municipal revenue, rather than property tax increases.

Small businesses understand that the cost of running a business like the Town increases over time, but they also know that there are limits to when and how much the customer can be asked to pay more for the service. Please consider adopting a revenue neutral tax rate.

In partnership,

Aaron Nelson

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