The price of low taxes

Published 12:00 am Sunday, May 25, 2014

Sooner or later, the “no tax increase” bandwagon reaches the end of the trail. In Rowan County, the wagon is about to roll over a cliff.
Taxpayers may protest. But Rowan County cannot avoid a tax increase this year.
The county manager’s proposed budget calls for a 3.75-cent increase in the property tax rate. That would raise the rate from 62.25 to 66 cents per $100 value. On a $100,000 house, county taxes would go from $622.50 to $660.
The tax increase will raise an estimated $4.2 million. But that won’t cover all the growth in county expenses. According to Gary Page’s budget message, just continuing business as usual — “continuation expenses” — requires an increase of $8.6 million. And he is recommending $1.7 million in new spending. So, even with the tax increase, balancing the budget requires pulling $6.1 million out of the county’s $15 million fund balance.
No wonder the majority of commissioners want a loan to repay the fund balance for the $3.425 million mall purchase. Without it, they’d have to dip below a safe level and/or raise taxes even more.

Back to the proposed tax rate, 66 cents. How does that compare to other counties? Pretty well. This year, while Rowan’s rate has been 62.25 cents, surrounding counties’ rates were: Davidson, 54 cents; Davie, 62 cents; Stanly, 67 cents and Cabarrus, 70 cents. Iredell’s rate was lowest, at 48.5 cents; it’s worth noting people in the Mooresville School District paid a school tax of 18.5 cents. Those counties may well be facing tax increases this year, too.
The proposed $133.5 million county budget goes to operate schools, provide law enforcement and jails, run Social Services and health departments and much more.

Page’s message actually identifies projects adding up to a bigger tax increase, at least 4.5 cents’ worth:
• One penny would go to pay off the $12 million bond issue to fund building improvements at Rowan-Cabarrus Community College. Voters were told in 2010 the project would necessitate a 1.25-cent increase, and they approved the bonds. Commissioners delayed, raising taxes only a quarter of a cent in 2012.
• A half-cent will increase school funding about half a million dollars.
• A half-cent will make payments on the mall loan.
• A half-cent will give county employees a 1.5 percent cost-of-living increase.
• 2 cents are said to make up for $2 million in vehicle tax revenue the county won’t see in 2014-15 year because of a software snafu this year.
Rowan County can’t hold the line on taxes forever. It has already waited too long.