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Wednesday, 05 September 2007 00:00

Swain to put land transfer tax on November ballot

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By Julia Merchant • Staff Writer

Swain County residents will vote November 6 on whether to enact a new tax on real estate transactions to bolster county coffers.

The tax is equivalent to 0.4 percent of a real estate transaction, or $800 on a $200,000 home. It would rake in an estimated $800,000 a year at current real estate sales levels.

County commissioners voted 4 to 1 last week to put the tax on the ballot. The option just become available following state legislation this summer. Swain, along with Macon, will be the first in WNC to test the new tax with voters. Counties were actually given two choices by the state for raising new money should they so chose: the land transfer tax or a quarter sales tax. The sales tax would generate around $200,000 a year for Swain.

While the property transfer tax would bring in more not, County Manager Kevin King told commissioners that the sales tax could prove more lucrative in the long haul. The real estate tax can ebb and flow with the housing market, while sales tax revenue tends to increase steadily every year.

At the commissioners’ meeting last week, it didn’t appear that commissioners had studied the issue as closely as King. But they eventually decided on the real estate tax because it had higher projected up-front revenues.

“I think we should go for more bang for the buck,” said Commissioner Steve Moon.

Commissioner David Monteith agreed that the real estate tax would be his choice because of its bigger initial revenue projections, but then said he wasn’t in favor of either tax. Monteith said placing a new tax on the ballot was a waste of the county’s time and money, since voters wouldn’t approve either option.

“I think we can live without it. It would be nice to have it, but I think we’ve taxed people enough,” Monteith said.

Monteith was the only commissioner to vote against the tax. Commissioners also passed a resolution to notify citizens how revenue from the tax would be spent — namely to fund construction of a new middle school and make improvements to the county’s existing schools.

 

The opposition

Realtors waged an unsuccessful lobbying effort against the property transfer tax when being considered by the state legislature. They claim it unfairly targets an industry that is already struggling.

Locally, the tax could place a burden on first-time homebuyers, said Realtor Dan Sikkora of Fontana Realty.

“An average resident is going to be pretty surprised when they see the government taking $800, in addition to other closing costs, on the sale of a $200,000 house,” Sikkora pointed out.

“It is already difficult for average local folks to afford local housing,” he said. “Adding another very significant tax will make it that much harder for that Swain County resident to get into a home, especially those first-time homebuyers.”

Realtor Trey Burns, owner of Treyburn Realty, said along with Sikkora that the quarter-cent sales tax option would be a more fair way to distribute a new tax and avoid targeting one segment of the population.

“(With the sales tax) much of the burden will be spread to non-residents who visit here and part-time residents. By spreading it around more evenly amongst everyone who shops in the county, it is more fair,” Sikkora said.

Burns agreed. As a native, he said he wants to equally protect both locals and out-of-towners.

“I’m kind of in a Catch-22 because I’m local, but my business deals with people from out of town. I want to take care of local people, but at the same time I want to cater to people from out of town, who makes some of the biggest economic impact on Swain County.

“I think Swain County would be better served by a sales tax, seeing that we have a lot of tourists,” Burns said.

Supporters of the property transfer tax, on the other hand, say it rightfully targets people moving into the county from elsewhere while relieving existing residents of some of their property tax burden.

 

Board of elections busy

The last minute decision by commissioners to place the measure on the ballot just met the Sept. 4 deadline to pull off a countywide election, but still leaves the Swain board of elections scrambling to prepare for a vote. There was already a town election being held for Bryson City residents in November, but the land transfer tax will go out to the whole county.

Following the commissioners’ decision last week, elections supervisor Joanie Weeks made a quick call to the company who prints the ballots. They’ve started rolling them out, and the board of elections is now in the process of preparing for the upcoming vote.

“We’ll just do it and hope to God everything goes good,” said Weeks.

Since the property transfer tax will be the only issue on the ballot for voters outside the small town limits of Bryson City, it remains to be seen whether the vote will be affected by low turnout.

“Normally you have a lot lower turnout. There’ll be more publicity, though, since different counties are having (a vote on the tax). Still, people aren’t used to voting in odd numbered years,” Weeks said.

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