County Manager's Budget Message

May 18, 2026

Honorable Chairwoman and members of the Cabarrus County Board of Commissioners:

I am pleased to present the Recommended Budget for Fiscal Year 2026-2027 (FY27) and the FY27 Community Investment Fund (CIF) capital investments for Cabarrus County.

The budget, as recommended, would maintain a tax rate of 57.6 cents per $100 of assessed valuation.

The recommended General Fund budget totals $412,174,074. Across all funds, the FY27 budget totals $ 559,576,464. The recommended General Fund budget reflects a 3.17% or $12,662,827 increase over FY26.

County staff worked diligently and creatively to overcome the challenges presented this year. Initial FY27 projections showed a deficit of $13,725,429. This resulted from the adoption of the FY25 tax rate of 57.6 cents, which was 2.4 cents below the recommended rate at the time.

Throughout the budget process, staff worked to ensure resources were used in the most effective and efficient ways possible. Funds were reallocated based on board priorities to minimize increases in the FY27 General Fund.

To further maintain balance, partner funding growth was limited to the amounts projected in the FY27 outlook.

Staff also managed rising costs in utilities and fuel that exceeded the 2.4% inflation rate projected by the Consumer Price Index. In addition, the County addressed mandated service needs, including the addition of 21 positions in the Sheriff's Office to support detention center and facility operations.

The FY27 Recommended Budget represents a strong focus on maximizing taxpayer investments. Our departments are already delivering on that promise. Here are some results from the first two quarters of FY26:

Impacts of population growth Cabarrus County is experiencing rapid growth and significant demographic change. Between 2020 and 2024, the population increased by 9.2% (nearly 21,000 residents). That number is projected to grow by approximately 10.2% more by 2030. At the same time, the community is becoming both older and more diverse. These trends are placing increased demand on mandated and non-mandated County services, a pressure expected to persist into the foreseeable future. Like many counties across North Carolina, Cabarrus faces the ongoing challenge of meeting these expanding service needs while maintaining, or potentially reducing, property tax rates for residents.

Economic outlook County unemployment remains low and continues to perform favorably compared to national levels. Over the past year, job growth in the Charlotte-Concord-Gastonia Metropolitan Statistical Area has been focused in education, health services, construction and professional/business services (U.S. Bureau of Labor Statistics). As of December 2025, the unemployment rate stood at 3.20% (Federal Reserve Bank of St. Louis). Unemployment is a key metric because increases typically result in higher demand for County services.

A stable labor market has helped drive the county's average private sector wage up to $54,013, according to the North Carolina Department of Commerce. Labor market conditions and ongoing competition for talent have led to substantial wage and benefit increases in the County's budget in recent years.

Impacts of unfunded mandates Cabarrus County continues to face increasing pressure from unfunded state and federal mandates. The County is absorbing rising costs within its budget for school operations, inmate care and housing, and reductions in Food and Nutrition Service (FNS) administrative reimbursements. Despite these challenges, Cabarrus has remained committed to supporting local school districts through locally funded staffing, teacher supplements, school nurses, resource officers and facility needs.

Potential constraints on traditional revenue sources may further strain future budgets. Additional risks include rising utility costs and volatility in fuel prices. Staff have budgeted conservatively in these areas, so continued instability may require contingency funds.

Projected needs Cabarrus County Schools (CCS), Kannapolis City Schools (KCS) and Rowan-Cabarrus Community College (RCCC) face significant facility needs driven by population growth and deferred maintenance. CCS and KCS collectively maintain more than 7 million square feet of building space and roughly 2,500 acres of school grounds. Addressing deferred maintenance remains an ongoing priority for all three systems, each of which conducts continuous evaluation and assessment to identify and respond to facility needs.

As Cabarrus growth continues, service demands are evolving across departments. Several departments identified expanded service needs driven by increased demand.

This Recommended Budget prioritizes public safety above all other requests, adding 21 new positions in the Sheriff's Office while maintaining the current tax rate. Rising jail populations require the opening of a new housing pod, which will need 16 additional Detention Officers to support 24-hour operations.

The opening of the new behavioral health center, coupled with the increasing complexity of mental and behavioral health cases involving children in Department of Social Services (DSS) custody, has created a need for continuous security at the Progress Place campus. To address this, additional deputy positions are included in the Sheriff's Office Government Unit. To help offset costs, these positions will be partially funded through state Social Services and behavioral health sources.

View the original page →

Staff also prioritized the purchase of four replacement ambulances and an EMS administrative vehicle, all of which were at the end of their service period. All emergency response vehicles are closely monitored for usage and maintenance. The County follows a structured replacement schedule to ensure the fleet remains reliable and in good condition, saving significant funds over time.

Also, cost recovery for critical services such as EMS was evaluated and implemented. EMS conducted a comprehensive review of its fee structure and recommended updates to better align with the true cost of service.

Meeting capital needs The following chart outlines proposed capital projects that can be funded with available cash on hand from prior-year fund balances. These proposed projects are based on the needs presented by Cabarrus County and local school systems.

FY27 Capital Improvement Plan (CIP) Pay-As-You-Go (PAYGO)

Efforts to limit growth in the budget Throughout the FY27 planning process, staff continually re-evaluated current budget projections and the five-year financial plan. Revenue projections were refined to reflect historical collection rates, and FY27 expenditure budgets were adjusted to more closely match actual historical spending patterns.

Additional complications continue to affect forecasts, including the volatility of fuel prices. This not only impacts the County's fuel cost projections but may also affect the cost of essential goods and services, including food supplies for the Detention Center.

Taking all this into consideration, minor adjustments were made to revenue forecasts, projected personnel growth and partner growth projections.

All partner agencies and school systems included in the County's budget were reminded to align their budget requests with established projections and avoid exceeding those parameters.

Staff utilized several strategies to balance the budget with no increases to the property tax rate or other taxes.

To help curb rising personnel costs, vacant positions were carefully evaluated. This resulted in the elimination of six positions in the proposed FY27 budget, offsetting some of the increases for the additional public safety positions.

In addition, several roles were reclassified or reassigned over the past two years to meet evolving needs without creating new positions. While last year's annual market study was deferred, a targeted review of "hot jobs" is proposed for Board consideration. This analysis will focus on high-turnover areas, such as Child Welfare, where vacancies remain a persistent challenge.

Contributions to other funds, such as the Landfill and Arena, were reduced, with those operations relying on existing fund balances in their enterprise and special revenue accounts to achieve a balanced budget.

View the original page →

The proposed budget maintains current insurance coverage for County employees while limiting cost increases through a change in providers. Retiree benefits established at the time of hire are also preserved. The budget also continues to fund merit increases, cost-of-living adjustments and longevity pay. Together, these measures aim to reduce turnover and mitigate the ongoing costs associated with recruitment, onboarding and training. County staff also worked collaboratively with the school systems to plan for potential teacher salary increases contingent upon adoption of the state budget. To address this uncertainty, a joint plan was developed that uses fund balance for the first year.

The proposed budget continues to support the school systems and Cabarrus Health Alliance (CHA) while allowing for measured, sustainable growth. It maintains substantial operational funding for the school systems and provides resources to address critical deferred maintenance needs.

CHA identified expansion needs driven by ongoing population growth, including increased demand from new food and lodging establishments and the need for additional Environmental Health staff to support septic system approvals and inspections. While these needs are recognized, expansion requests from CHA and the school systems (including additional positions and increases in teacher supplements) are not included in this Recommended Budget.

Considering current projections, the Recommended Budget is balanced while maintaining AAA credit ratings from three major rating agencies. A funding proposal is on the table at the Local Government Commission to obtain funding for two new construction school projects while preserving the current tax rate. However, any future large-scale construction projects and/or deferred maintenance will require a new debt package and a corresponding tax increase to address those needs.

Staff have worked closely with the local school systems and school boards to initiate the process for General Obligation bonds, which would be included for consideration on the November ballot.

Five-Year Outlook Achieving a balanced budget this year without increasing the property tax rate represents a significant accomplishment. However, based on current projections, this may be the final year the County can maintain existing service levels across all areas without seeking increases in revenues.

Under assumptions of 2% annual growth in property tax revenue, sales tax and other revenue sources, the County is projected to face a $9.7 million shortfall in FY28. Expenditure assumptions include 4.5% growth for education partners, 5% for County personnel, 4% for CHA and 3% for operating expenses. Under these assumptions, projected deficits increase to $19.6 million in FY29, $30.3 million in FY30, and $41.8 million in FY31.

Long-term planning will depend on several developing factors, including clarification of future revenue options, emerging service demands and the outcome of the potential General Obligation bond referendum. Without significant adjustments to revenues or expenditures, the current trajectory is not sustainable at the existing tax rate.

Acknowledgements I would like to recognize several staff members who worked tirelessly and creatively to address the projected deficit and develop a sound FY27 budget. I am especially grateful to Rosh Khatri, Yesenia Pineda and Sophia Politis for their thorough and collaborative approach in responding to numerous requests for information throughout this lengthy process. I also extend appreciation to Todd Shanley, Kyle Bilafer, Dr. Aalece Pugh and Jim Howden for their strong teamwork and support.

In addition, I would like to thank Mitzi Odell, Ashley Dobbins Lingafelt, Tom Nunn, Suzanne Moose and all the department heads and supervisors who worked diligently alongside the management team to develop this budget.

I especially extend thanks to the Board of Commissioners for its service to the community. As you consider this budget, you will receive significant public input both directly and indirectly. Budget decisions affect the entire community and require collaboration, thoughtful deliberation and a shared commitment to long-term stability. I appreciate the seriousness and responsibility of those decisions.

It is with a strong sense of accomplishment that I submit this Recommended Budget to the Board. Staff faced a challenging budget season and responded with creativity and diligence, identifying innovative solutions that result in a balanced budget that meets the essential needs of the community.

We look forward to the Board's thoughtful consideration of this Recommended Budget, as well as continued input from residents and businesses, ahead of adoption on June 15, 2026.

Respectfully Submitted, Kelly Sifford, AICP Interim County Manager

View the original page →