Editor’s note: This article was written by the board of directors of Rowan Partners for Education.
As the time for passing a new county budget approaches, a few questions keep resonating in many minds: What are the county’s priorities? How do we fare in comparison to neighboring counties? How does the tax rate really affect my wallet? And lastly, are there long-term consequences to this year’s budget?
Rowan Partners for Education (RPE) has been reviewing the Rowan-Salisbury School System’s budget for four years now. Our main focus has always been advocating for quality public education in our county. While this year is no different from past years, our board of directors believes a broader look may be a more appropriate way to think about this year’s budget. This broader look includes a general look at non-education capital projects in the county and a larger look at other budget issues, as well as a narrowing of focus back on the needs of our schools and students. RPE would like to take this broader approach and address the four questions we believe are on the minds of many Rowan County taxpayers.
1. What are the county’s priorities?As a prelude to this year’s budget, Commissioners have heard from the judicial system, the Sheriff’s Office, the Health Department, the schools and all county departments regarding their operating and capital needs. One expects a growing county will always have an increasing demand on services. This year’s requests from the different areas of county government are no exception to this point. Thankfully, positive capital projects have been approved in the recent past, which has increased the county’s infrastructure and enhanced departments’ ability to deliver services. The renovation of a new County Administration building, a new location for the Health Department, a new South Rowan Library, additions to Rowan-Cabarrus Community College, as well as the extension of water to various parts of the county are just a few examples of these positive projects. Additionally, the 2002 bond referendum has built four new schools and allowed extensive renovations during the last five years. While the county is reaping great benefits from these projects, we cannot forget the debt service for many of these capital improvements will continue to be funded with general fund dollars five and even 10 years into the future.
As the county looks to layer the debt service of past projects with the new requests associated with expanding the airport, new social services facilities, a detention center expansion, a judicial expansion for new district courtrooms, and the continued capital needs of the schools, the funding picture gets quite ominous. The county finance director and the county manager have presented commissioners with a schedule of proposed capital projects, which takes both current debt and future needs into consideration. The reality of this schedule is quite telling. For example, the expansion of the detention center, which is currently over capacity, could not be initially funded until 2018. Likewise, with continued debt service for previous school construction projects carrying out to the year 2020, additional school needs are pushed out well into the future. The highest prioritized item on the list of school capital improvement projects provided to commissioners earlier in the year would only be funded in 2013. More specifically, the much-needed replacement of Woodleaf Elementary would only be possible in 2018 and the replacement of Knox Middle School would not be until 2025.
Questions remain: What are the county’s priorities? Do we lower taxes, fill capital needs or find a balance between the two? Are the timelines listed above congruent with the priorities of a majority of our citizens? If so, great! If not, how do we affect the revenue stream to amend this schedule? How do citizens of Rowan County really feel about tax rates when the ultimate cost is the deferment of important capital projects? The setting of our county’s priorities is an important issue and it demands a serious public debate.
2. How do we fare in comparison to neighboring counties?
This is a very difficult and complicated question to answer. Our neighboring counties vary from us in many ways, some of which are obvious ó population, area and closer proximity to metropolitan areas ó and others that are not so obvious. For example, some counties have a higher property tax base per citizen while others are able to rely more heavily on sales tax revenue rather than property tax revenue. Comparisons of this sort are always dangerous given the multiple factors involved in generating revenue for a county. However, some comparisons are necessary to clarify our county’s position.
First, it should be noted Cabarrus and Stanly counties have similar property tax rates to Rowan in the current fiscal year. Cabarrus had a rate of 62.89 cents per $100 of valuation while Stanly’s rate was 64.5 cents, both of which favorably compare to the 2006/2007 Rowan county tax rate of 63.0 cents. The tax rates in Davie and Iredell counties are both currently below Rowan County. A closer look must be taken because tax rates alone do not give an honest assessment of revenues available to these counties. For example, while Davie County’s tax rate is 58 cents per $100 of valuation, the tax burden per citizen in Davie County is nearly 4 percent higher than ours. Iredell County’s tax rate of 43.5 cents, which is often discussed as a reason for lowering our tax rate, also deserves closer scrutiny. Simply put, Iredell County’s larger property tax base per citizen and higher sales tax revenue easily account for the near 20-cent difference in tax rate. Iredell County has a property tax valuation per citizen of $98,709 while Rowan County has $73,287 ó more than a $25,000-per-citizen difference, which equates to a 34 percent higher tax base per citizen. Couple this with Iredell’s sales tax revenue being 41 percent higher than Rowan, and it is easy to determine why there is such a significant difference in tax rates. Interestingly enough, Iredell County actually generates nearly $100 more per citizen in revenue than Rowan County, with a 20-cent lower tax rate.
The ability to keep property tax rates low for any county depends on more than a reduction of expenses. The ability to keep property tax rates low depends on a county’s ability to generate a higher tax base as well as the county’s ability to generate non-property tax revenue, namely sales tax. In addition to Iredell County’s success in both of these areas, it is important to point out the similar success of Cabarrus County. Although the Cabarrus tax rate was set at 63 cents, the same as Rowan, for the current fiscal year, the 2006-07 Cabarrus County budget spent 14.5 percent more money per capita than Rowan. Again, the comparison of tax rate alone falls far short of painting a clear picture of revenues and expenses in counties.
3. How does the tax rate really affect my wallet?
No citizen wants to pay one dollar more than he or she feels necessary in property taxes. Each year as budget discussions get geared up and articles are written assessing the impact on an average Rowan County citizen, it seems a common example is used. “What is the increase in taxes on a $150,000 home?” Let’s take such an example and look at it from the citizen and budget perspective. What is the affect of a one-cent tax on property? For an owner of a piece of property valued at $150,000 the affect is $15 per year, or $1.25 per month, or less than five cents per day. If county needs are being met and appropriate planning has been done for the future needs, a case can be made even a penny a day is too much.
However, a look from the budget perspective is quite different. What impact could five cents per day have on the capital improvement schedule outlined by the county manager? For less than five cents per day, or one cent of tax on property, the county generates roughly $1 million of revenue annually. If this $1 million is earmarked for capital improvement projects, the county is able to leverage the $1 million into the borrowing of $10 million to address future needs for the county. What does $10 million buy for Rowan County? Based on capital projects outlined by the county, a new facility requested by Social Services would cost $5.13 million, or the replacement of Woodleaf Elementary is estimated at a cost of $14.34 million, and the cost to replace Knox Middle School is $24 million. Are any of these projects worth less to the citizens of this county than the five cents a day required to leverage $10 million? As citizens of Rowan County, we decide. As we make these decisions, however, let us think of the good of all the citizens of the county and their children and future generations. And when you make these decisions, you should take the time to let your county commissioners know your opinion.
4. Are there long-term consequences to this year’s budget?The 2007-08 budget being debated now will affect this county for years to come. The deferment of pressing capital improvement projects 10 years into the future is one obvious consequence. The other consequence citizens should consider is what happens to the county budget next year. Next year brings a county election, which corresponds with a long history of flat tax rates for our county. What happens next year when expenses increase in operating budgets without the possibility of a tax increase? And how much farther into the future do capital projects get pushed? Does keeping the amount of tax paid by property owners of this county unchanged ó i.e., revenue neutral ó in this budget year make sense? Are we thinking about, or more importantly planning appropriately, for the future of this county?
What can a citizen do to create change?
The challenge of balancing tax rate and providing for the needs of citizens is always a difficult task. However, the complexity of issues associated with developing a county budget and setting a property tax rate are not so insurmountable that discussions about real cost and impact cannot occur in a public way. Unfortunately, it is easier to frame discussions around a single concept like “revenue neutral” and not get messy by sharing a cost-benefit approach or by discussing the long-term impact of saving $1.25 a month with citizens. This type of oversimplifying is truly a shame because changes in local politics can be created by as few as 12 phone calls and/or e-mails to commissioners. A close look at comments during last year’s budget hearings makes an equally shameful example. Nearly all of the speakers during the budget hearings were either individuals running for office or interest groups. Ask yourself, “Is this the most effective way to determine the future of this county?”
In conclusion, we would like to return the focus back to the needs of our students and schools. Rowan Partners for Education is pleased with the positive changes we have seen in Rowan County schools, in the open communication being delivered by the school administration, and in the planning that is occurring at all levels of our local public education system.
Doctor Grissom and the School Board have requested an increase in school funding of $5.77 million. This year’s request was presented with more supporting documentation than RPE has seen over the last four years. RPE’s review process has found all of the requests to be appropriate and consistent with moving our School System forward. However, taking a longer range approach, RPE makes the following recommendations:
– At a minimum, commissioners should fund the schools to the state average per pupil expenditure. his is an increase of $2.6 million.
– Commissioners and the School Board members should come together and sign a resolution supporting continued funding at the state average for a predetermined period of time and to develop plans for additional meetings between the two boards to ensure ongoing positive dialogues.
– Additional revenue must be generated with capital needs in mind. The deferment of capital needs as outlined in the proposed schedule is not acceptable and is not in keeping with what we believe are the wishes of Rowan County citizens. We can and should do much better for our children and our citizens.
Rowan Partners for Education also recommends that citizens concerned about the upcoming budget and the educational future of the children of this county contact their commissioners and make their opinions known. Never take for granted the impact one phone call or e-mail can make. The future of our county rests in your hands every day ó not just every other year in November. Civic responsibility is more than voting, and expressing your opinion to commissioners can take even less time than driving to the polls. Please do your part in helping set priorities for this county.
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Contact information for the Rowan County Board of Commissioners:
Arnold Chamberlain, chairman; 704-637-1874; ASC@co.rowan.nc.us
Chad Mitchell, vice chairman; 704-279-8282; MitchellC@co.rowan.nc.us
Jon Barber; 704-223-1637; BarberJ@co.rowan.nc.us
Tina Hall; 704-278-0951; HallT@co.rowan.nc.us
Jim Sides; 704-637-1297; SidesJB@co.rowan.nc.us
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Rowan Partners for Education is an independent, citizen-led initiative for the improvement of local education. For more information, visit the group’s Web site, www.educaterowan.org, or call 704-642-0700.