Why Is the State Getting Involved in Greensboro's Budget? Here's What's Actually Going On

If you have heard neighbors talking this week about "the state taking over" something in Greensboro because our leaders could not balance the budget, you are not imagining things, and you are not the only one confused about the details. Greensboro City Council held an emergency meeting on Thursday after the state's Local Government Commission placed the city on its financial watch list, called the Unit Assistance List. I dug into what happened, why, and who is involved, so you can understand it without wading through weeks of council minutes and news clips yourself.

The Short Version

Greensboro was notified this week that the North Carolina Local Government Commission (LGC), the state agency that oversees local government borrowing and financial health, has placed the city on its Unit Assistance List, the state's own public roster of local governments under closer fiscal monitoring. This is not the same as a full state takeover of city finances, but it is a formal warning. The LGC's concern is specific: Greensboro's rainy day reserve fund is not being built back up fast enough, and the city has been using reserve dollars to cover regular operating expenses rather than one time costs. Mayor Marikay Abuzuaiter called an emergency public meeting Thursday afternoon to address it, and it got tense.

To understand why this is happening now, you need the background on the property tax fight that has consumed Guilford County and Greensboro all summer, because it is the same underlying story: a budget squeeze that started with a decision made in Raleigh, not in Greensboro City Hall.

How We Got Here: The Property Tax Revaluation Fight

Guilford County completed a full property revaluation earlier this year, as required by state law on a five year cycle. Property values across the county jumped significantly, with many homes in intown Greensboro neighborhoods rising 40 to 65 percent. That is normal after a long gap between revaluations, and by itself it does not automatically raise anyone's tax bill. Local governments are supposed to adjust their tax rates downward to offset higher values, a process sometimes called "revenue neutral."

Then, in June, the North Carolina General Assembly passed Senate Bill 889, ratified as Session Law 2026-8, which placed a one year moratorium on using Guilford County's new 2026 property values. Counties that had already completed a reappraisal effective January 1, 2026, were told to keep using the old, lower values for the coming fiscal year instead. For Guilford County, that single decision erased an estimated 92.7 million dollars in projected property tax revenue almost overnight, just weeks before the July 1 budget deadline.

I covered the mechanics of this in more detail in What the 2026 Guilford County Revaluation Means for Property Taxes in Greensboro, and what happened once Council actually set the rate in Greensboro FY 2027 Budget Explained, if you want the full story on your tax bill specifically.

Guilford County's Scramble

Guilford County had to throw out its nearly finished budget and rebuild it in about two weeks. County Manager Victor Isler had originally recommended a 935.5 million dollar budget built around the new revaluation, with a lower tax rate. SB 889 forced a revised framework roughly 83.7 million dollars smaller. The Board of Commissioners, chaired by Skip Alston, ultimately adopted an 889.2 million dollar budget on June 25, raising the county property tax rate by 5.9 cents to 78.95 cents per 100 dollars of assessed value to make up part of the gap. Alston called it the first time in his experience that the state has stepped in to block a county from using its own completed reappraisal.

Guilford County Schools took a direct hit in this process. The district had requested roughly 307 to 313 million dollars in county operating funds and received 288.1 million, about 25 million dollars short of its request. As recently as August, the school board was back before commissioners asking for another 5.3 million dollars after the state's own budget included larger teacher raises than districts had planned for.

Greensboro's Own Budget, Then the Lawsuit

Greensboro City Council faced the identical choice the county did: adopt a budget assuming the higher revaluation values, or build around the old ones. Council chose the pre-revaluation path and raised the city property tax rate by 12.6 cents, from 67.25 to 79.85 cents per 100 dollars, adopting a 909.8 million dollar budget on June 16.

That budget process also drew a legal challenge from resident George Hartzman, who sued the city over how the FY 2027 budget was adopted. I wrote up what that lawsuit actually alleges and what North Carolina law requires for public budget hearings in Understanding Greensboro's Budget Lawsuit, if you want the details on that separate piece of this year's budget story.

Now the City Itself Is Under State Watch

This week's news is a new development on top of all of that. The Local Government Commission's Unit Assistance List is a roster of local governments the state is watching more closely because of financial management concerns. Greensboro ended fiscal year 2025 with nearly 100 million dollars in reserves, so this is not a story about the city running out of money. The state's specific concerns are that Greensboro is not rebuilding its fund balance percentage toward the recommended 25 percent level as quickly as officials want, and that the city has been dipping into reserves for operating costs rather than one time expenses.

Mayor Abuzuaiter called Thursday's emergency meeting to respond to the formal notice, which the city actually received Wednesday afternoon. The city posted its own short Statement Regarding Unit Assistance List confirming the placement. Finance staff explained that Greensboro's reserve fund grew in real dollars over the past fiscal year, from about 94 million to roughly 98.3 million, but expenses grew faster, so the reserve as a percentage of total spending actually slipped, from 23.3 percent down to 22.9 percent. City officials pointed to several drivers behind that increase in spending, including higher public safety costs, building maintenance, and money the city had to set aside in advance for future fire truck orders. Apparatus makers nationally are backed up, and cities now have to commit funding years ahead of delivery just to hold a place in the production line.

Councilmember Hugh Holston compared the state's action to a corporate performance improvement plan and said the city needs to "pump the brakes," raising the possibility of real austerity steps. City Manager Trey Davis told council that landing on the Unit Assistance List does not mean the city is in a financial crisis, and that a Local Government Commission supervisor described the underlying issue as specific and very fixable, though there is no firm timeline yet for getting off the list. City staff has already flagged roughly 1 million dollars in personnel savings and another 1 million in contract savings as a starting point. Greensboro will also now need Local Government Commission sign off on some financing involving capital assets and vehicles that previously did not require that extra review.

A separate frustration surfaced Thursday too. Assistant City Manager Larry Davis told council that staff had been warned about a possible Unit Assistance List placement roughly two weeks earlier, but Mayor Pro Tem Denise Roth and other council members said they had not been told. Much of the meeting ended up being about that communication gap between the city manager's office and the elected council, not just about the state's specific financial concerns.

Fire Trucks, a Bridge, and a New Fire Station: What Might Get Cut

This is the part of the story that has neighbors talking, and it is a real tension, even if some of the details getting repeated are a little off. Council members spent part of Thursday's meeting debating whether to delay bond funded capital projects to ease the pressure on the reserve fund. Two specific items came up by name: replacing the aging bridge on Washington Street, and building a new fire station.

Mayor Abuzuaiter pushed back on moving too quickly on those cuts. She pointed specifically to fire stations, warning that failing to keep up with fire protection needs could eventually hurt the city's fire protection rating, the technical score insurers use to help set homeowners insurance premiums. In other words, delaying a fire station to save money now could end up costing residents more later in their insurance bills.

Here is the background that explains why a new fire station is even on the table. Greensboro's Fire Department has said publicly that it needs to build 11 new stations by 2040, at an estimated 5 million dollars each, to keep up with population growth the city expects from new industry. City planners have pointed specifically to Toyota Battery Manufacturing North Carolina, JetZero's aircraft manufacturing project at Piedmont Triad International Airport, and Boom Supersonic as major job engines pulling new residents into the area, with the city's population potentially reaching 400,000 within a decade. The first new station in that plan, Station 62, is prioritized for the fast growing Sedgefield area in southeastern Greensboro, not literally at the Toyota Battery site itself, which is actually about 28 miles away in Randolph County near Liberty. But the underlying point holds up: growth tied to Toyota and other new employers is straining Greensboro's existing 27 fire stations, and the city can only annex new neighborhoods if it can show it has the fire, police, and utility capacity to serve them. That is the real story behind what your neighbors may be describing as new residents moving in with no fire coverage. It is less a single missing station for one plant, and more a citywide buildout racing to keep pace with growth, a buildout that is now competing for scarce dollars with the state's demand for a bigger rainy day fund.

The Washington Street bridge is part of the same squeeze. City staff has also identified the Gorrell Street bridge and a bridge along the A&Y Greenway as needing replacement, alongside fire station work and recreation center improvements, as top priorities for a bond that has been in planning for the 2026 ballot. Every one of those projects now gets a second look because of the new state oversight.

Other Big Dollar Items Already Under a Microscope

The fire truck and bridge questions are not the only large financial items Greensboro has been dealing with this year. Two others are worth knowing about if you want the full picture:

• A federal court has ordered the government, meaning taxpayers, to potentially pay Greensboro developer Marty Kotis more than 52 million dollars over a rails to trails dispute involving the Atlantic and Yadkin Greenway. You can read the actual Court of Federal Claims opinion in Kotis Associates, LLC v. United States, No. 20-932 directly. That judgment is under appeal and nothing has been paid yet, but the exposure is real. I covered the full history in How Did We End Up Owing a Greensboro Developer 52 Million Dollars and in Midtown's Rails to Trails Saga, which walks through both sides of the dispute and the Red Cinemas closure.
• Resident George Hartzman's lawsuit over how City Council adopted the FY 2027 budget is still working its way through the courts, adding legal cost and uncertainty on top of everything else. A Guilford County Superior Court judge denied Hartzman's request for a temporary restraining order to block the budget, though the underlying case continued. Background is in Understanding Greensboro's Budget Lawsuit.

I want to be straightforward about what I did and did not find. Some residents online have raised broader accusations about spending at city affiliated nonprofits. Those allegations have not, as of this writing, been confirmed by independent news reporting, so I am not repeating specific claims or dollar figures here. If credible reporting develops, I will cover it.

Who Is Involved

• Marikay Abuzuaiter, Mayor of Greensboro, who called the emergency meeting and is the city's lead voice on the response.
• Trey Davis, Greensboro City Manager, who is coordinating with the state and reported that the issue is considered fixable.
• Larry Davis, Assistant City Manager, who briefed council on the fund balance requirement and the timeline of the state's warning.
• Denise Roth, Greensboro Mayor Pro Tem, who was among the council members who said they had not been told the Unit Assistance List placement was coming.
• Hugh Holston, Greensboro City Councilmember, who has been vocal about the need for tighter fiscal discipline.
• The North Carolina Local Government Commission (LGC), the state body, chaired by the State Treasurer, that oversees local government debt and financial health statewide and placed Greensboro on its Unit Assistance List.
• Skip Alston, Chair of the Guilford County Board of Commissioners, who has been the county's lead voice on the separate but related SB 889 revaluation fight.
• George Hartzman, the Greensboro resident whose lawsuit over the city's FY 2027 budget process is still working through the courts.

Primary Sources, If You Want to Read the Actual Documents

I would rather point you to the original documents than ask you to take my word for anything. Here is where the underlying facts in this post come from:

• The Local Government Commission's own Unit Assistance List page, which explains the criteria and obligations for units on the list.
• The City of Greensboro's official statement confirming its placement on the list.
• Senate Bill 889 on the North Carolina General Assembly's own bill tracking page, with links to every version of the ratified text.
• Guilford County's press release on its adopted FY 2027 budget.
• Greensboro's press release on its adopted FY 2027 budget.
• Greensboro's Bonds page, where the fire station, bridge, and recreation center projects under discussion are tracked.
• The Court of Federal Claims opinion in Kotis Associates, LLC v. United States, the actual ruling behind the 52 million dollar judgment.

What This Means If You Own, Buy, or Sell Property Here

None of this changes what is already on your current tax bill. This year's rates are set. What it does mean is that Greensboro's finances will likely be under more visible scrutiny in the months ahead, which could show up as slower capital spending, tighter departmental budgets, or continued public debate over reserve policy at council meetings. If you are weighing a purchase or sale in Greensboro right now, it is worth watching how this plays out, since infrastructure and service levels are part of what makes a neighborhood desirable long term. I will keep following it here on the blog.

This post is general information, not legal, tax, or financial advice. Talk to your attorney, CPA, or the relevant city or county office about how any of this applies to your specific situation.

Joy Watson Real Estate is an independent, non-corporate brokerage in Greensboro, NC. Joy Watson is a licensed North Carolina real estate broker (Broker-in-Charge). Questions about buying, selling, or renting in the Triad? Reach out through JoyWatsonRealEstate.com.