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Nags Head passed the fiscal year 2025-26 budget at the June 11 commissioners meeting with a general fund budget of $31.4 million, a decrease of almost $10 million.

The decrease was caused mainly by grants and capital projects, town manager Andy Garman explained in a May 7 budget presentation.

Notable in this year’s budget was the property reevaluation done by Dare County, which saw a 59% increase in the value of personal property and vehicles in Nags Head, totaling about $5 billion. To collect the same amount of money as last year under the old valuations, Nags Head calculated the “revenue neutral” rate at 20.87 cents per $100 of assessed value, well below the prior rate of 33 cents.

However, because of several factors, Garman recommended levying taxes at 23.2 cents. Nags Head residents will see a slight increase in their taxes overall; the increase will go to pay for beach nourishment and higher-than-expected health insurance costs for town employees. Beyond that, Garman said, inflation has put hefty price tags on projects and equipment.

In 2020, a new sanitation truck cost $265,000; in 2024, that same truck was $400,000. Likewise, bathhouse construction prices have gone up significantly. The Bond Street project cost $448,900 in 2016. A similar project in 2024 totaled $860,480.

Shared revenues—sales tax, occupancy, tax and land transfer taxes—are budgeted to decrease in the 2026 budget. Tourism is leveling out on the Outer Banks, so Nags Head staff opted for a conservative number. These shared revenues allow local municipalities to keep the tax rate low for residents, and the high numbers in the previous years have allowed towns to undertake some much-needed projects.

“We had several years with significant surpluses in revenue,” explained Garman. “We took the initiative to spend that money on things that we needed to catch up on from the last 10 years of recessionary trends. We were sort of behind on a lot of our equipment, vehicles, and maintenance of our buildings and our assets and infrastructure.”

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