Displaying items by tag: tax

In an effort to extinguish delinquent vehicle taxes, the North Carolina General Assembly passed a law that will combine vehicle property tax and car registration into one bill.

When it goes into effect, drivers can’t get their tags renewed until they’ve also paid their vehicle property taxes.

Swain County voters are being asked this election whether they want a quarter-cent sales tax increase to help pay for school construction.

The quarter-cent sales tax would bring in roughly $250,000 a year and would pay for a $2 million expansion of East Elementary. The additional classrooms would let the school do away with “dilapidated” modular units that currently serve as classrooms to handle overcrowding, said County Manager Kevin King.

Just after the New Year, property owners in Swain County will find out just how well — or how poorly — their property weathered the real estate downturn.

Swain County is wrapping up a countywide property revaluation, where every home, lot, business and tract of land is appraised with an up-to-date real estate value. Property values in turn dictate how much someone pays in property taxes.

fr issuesDemocratic and Republican candidates squaring off in state races this year offer voters a clear choice on a key philosophical issue gripping North Carolina during the past two years: taxes versus budget cuts.

fr jaxforeclosuresDelinquent property tax payers beware — Jackson County is coming for you.

For more than a year, county tax collectors, with the help of contracted private attorneys, have been aggressively targeting property owners who owe substantial back taxes — and they are wielding foreclosure as a tool to force payment.

Gov. Beverly Perdue laid out a proposal last week to increase the state’s sales tax by three-quarters of a cent to fund education.

The move would generate an estimated $850 million for the state’s public schools, community colleges and universities — money Perdue says is necessary to make up for the Draconian cuts to education at the hands of Republican legislators.

“We owe it to our children and our state to stop these cuts and make education a priority again — a fraction of a penny for progress,” Perdue said in a conference call with news reporters last week.

North Carolina is now 49th in the nation in per-pupil funding for education. Perdue said she was dismayed by what she considers the sell-out of the state’s long-standing reputation as a leader in education in the South.

“When I see a list with North Carolina in per pupil funding worse than Mississippi, Alabama, Arkansas — all these states that for generations had tried to be more like North Carolina — I feel like there is something really dangerous happening to North Carolina,” Perdue said. “It is shameful. It is wrong.”

But, the sales tax has no hope of passing muster with the Republican-controlled General Assembly, according to Sen. Jim Davis, R-Franklin.

Republicans are chalking Perdue’s proposal up to campaign posturing in her re-election bid this year.

“It is not going to go anywhere in the House or Senate,” Davis said.

Davis said an economic recovery is the best bet for boosting state coffers, and a tax increase would run counter to a recovery.

“We believe the economy is still very fragile and that money is best left in the hands of the private sector in the hopes that it will generate jobs and consequently increase revenue under the present tax structure,” Davis said.

But, Perdue is pitching the tax hike as an investment in children.

“I have never met a parent or a grandparent that actually didn’t want a better life for their child or grandchild than they’ve had themselves,” Perdue said.

The argument frames Republican lawmakers as putting the interests of children second.

“Of course she wants to make us out like bad guys so she can win the election,” Davis said.

But, Davis said Republicans’ stance against a tax increase is equally looking out for the interests of children.

“I don’t want anyone’s grandchildren or my grandchildren to inherit this legacy of debt,” Davis said.

He also questioned whether more money is always the answer.

“We believe the educational system has problems that money won’t fix,” Davis said.

Perdue will likely find allies in the ranks of public schools and universities. Bill Nolte, the assistant superintendent for Haywood County Schools, said education is hurting and could use any help it can get.

“If the governor or any other elected official can stop the bleeding, good for them,” Nolte said.

The Haywood County School system has lost $8 million and more than 120 positions during the past three years, Nolte said.

The result is larger class sizes and fewer teacher assistants. Teachers also have less help dealing with at-risk students, with students who can’t speak English and with special needs students — which takes time away from teaching the rest of the class.

Schools can brace for more cuts this coming year when a stream of federal stimulus money that until now had softened states’ budget crises is phased out.

Nolte admitted that the Republican leaders are keeping the promise they made to voters when they swept to power — namely that they would let a 1-cent sales tax initially billed as a temporary recession measure finally sunset and make up the difference with cuts.

“That is exactly what they did,” Nolte said. “They cut taxes that were being used for education and other essential services. I don’t think anyone can say they were surprised.”

 

Political instant replay

The debate over a sales tax increase for education is largely a replay of last year’s budget showdown between the Republican-controlled General Assembly and the Democratic governor. Republicans say Perdue has no chance of changing the outcome this go around and that her sales tax pitch for education is already dead in the water.

Last year, the governor vetoed the state budget crafted by Republicans. She wanted a sales tax increase to offset cuts to education. Both the House and Senate had enough votes to override the governor’s veto, however.

The Senate had a veto-proof majority of 31 Republicans compared to 19 Democrats. In the House, five Democrats joined with Republicans to override the governor’s veto.

To have any hope of success this time around, the governor would have to swing two Republicans in the Senate to her side and keep the five Democrats in the House from breaking ranks.

Even then, a bill to increase the sales tax by three-quarters of a cent could be far-fetched. It would require bringing a vote to the floor of the General Assembly — and since Republicans control the agenda they won’t even let it come to a vote, Davis said.

Perdue vowed to take her message on the road and hopefully raise enough Cain that voters will demand action.

“I am going to go in every legislators’ backyard to get this funding passed,” Perdue said. “I hope the people of the state think about this.”

Swain County’s Tourism Development Authority will appeal to county officials for a 1 percent increase in the room tax rate.

The tax on overnight lodging currently stands at 3 percent. The proposed increase would bring in at least an additional $100,000 annually to support tourism initiatives.

Monica Brown, chair of Swain County’s Tourism Development Authority board, said the idea came from business owners who approached her about raising the tax. The extra money could help fund special projects without burdening local residents.

“Basically, there is a lot of capital stuff we would like to help the county with,” Brown said. “It would give us more funding to work.”

Such projects could include helping the Great Smoky Mountain Railroad construct an engine turntable or Bryson City restore the historic courthouse for a visitors center and museum. The extra funds could be used toward beautification efforts and signage near the Nantahala Gorge, the site of the 2013 World Freestyle Kayaking Championships expected to bring thousands of visitors to the county.

“(The tax is) more for promotion of tourism in Swain County overall and a main part of that is the appearance,” Brown said.

The county can currently use up to 30 percent of its current room tax collections on capital projects, including the Christmas lights featured throughout downtown Bryson City.

A 3 percent tax is already tacked on to a visitor’s room rate. If someone pays $100 to stay the night in a Swain County hotel or inn, he or she will pay an additional $3, not counting sales tax, to occupy the room. If the increase is approved, that visitor will pay an extra $1 — for a total of $4 — each night.

Brown said the authority wanted to be “conservative” so it will only seek a 1 percent jump in room tax, although state law allows a room tax of up to 6 percent.

Jackson County has recently proposed increasing its room tax to the full 6 percent. More than half the counties in the state already levy a room tax of more than 3 percent, with a definitive trend in recent years among counties to increase the rate.

The Swain County tourism agency is “Right in line with what we are doing across the state,” Brown said. “And, an increase in the room tax is not going to impact the number of visitors to your area.”

The tourism authority has raked in between $300,000 and $353,000 a year in room tax revenue since at least 2006. Swain is one of the few counties that has escaped a downturn in its room tax collections as a result of the recession.

“We have enjoyed pretty steady room tax numbers in Swain County,” Brown said.

The tax has remained at 3 percent since its inception in the 1980s.

The extra 1 percent would be kept separate from the other 3 percent, which funds mostly marketing and promotions, said Karen Wilmot, secretary of the TDA board and executive director of the Chamber of Commerce.

The Tourism Development Authority splits its advertising dollars between print and online media. About 70 percent of the advertising budget funds traditional print ads, while the remaining 30 percent targets Internet users. Like other Western North Carolina tourism agencies, Swain County’s TDA focuses its efforts in North Carolina, South Carolina, Georgia, Florida and Tennessee.

“We tend to take a really conservative approach to our advertising,” Brown said. “We try to do a lot with a little bit of money.”

The key to obtaining support for the 1 percent increase will be reminding residents of how the Chamber of Commerce and tourism authority has used the room tax to benefit the county, Brown said.

“I want everyone to understand the focus of the tax,” Brown said. “How it benefits the community as a whole.”

But, in order to obtain the increase, the agency must appeal to local government officials and its constituents for support.

“I honestly don’t know” when the measure could be put to a vote of county commissioners, Brown said.

The tourism agency will need to  discuss the possible increase with the county commissioners and then with its lodging owners before even thinking about the vote.

It’s a “lengthy procedure,” Brown said.

 

Mixed reviews

The idea of an increase received mix reactions from lodging owners in the county who had not heard about the possible change.

“I would not be wanting to add any more to my guest’s room fee than I need to,” said Ed Ciociola, owner of Calhoun House Inn & Suites. But, if it helps advance tourism in the county, he said he would approve of the rise.

A handful of inn, motel and hotel owners vehemently disapproved of the plan, however.

“I am definitely not in favor of any new taxes,” said Blain Slobe, owner of Two Rivers Lodge. “I don’t see raising the tax 1 percent as helping tourism at all.”

If people are spending more money each day on their room bills, they will cut down on the number of days they spend in Swain County, he said.

Several cited the still slow-growing economy as a crucial reason for forgoing the increase.

“I think 3 percent is high enough,” said Mercedith Bacon of West Oak Bed & Breakfast & Cabins.

Bacon said that the tourism agency does an adequate job with the resources it already has and that businesses are still fragile following the recession.

“I just don’t think this is the time,” Bacon said.

A couple of business owners said they would like to hear more information before deciding whether to oppose or support a 4 percent tax rate.

“I don’t think I can say yay or nay,” said Mort White, owner of Hemlock Inn.

Brown was not surprised by people’s responses when they initially heard about the potential increase and said she thinks the majority of business owners will eventually favor the move.

“I think there is almost a knee-jerk reaction” to oppose the tax, Brown said. “I think we just have to let them know what it’s going towards.”

 

By the numbers: Current tax rates

• 3 percent: Swain, Clay, Graham, Macon, Mitchell, Yancey

• 4 percent: Haywood, Buncombe, Transylvania, Cherokee

• 5 percent: Henderson, Madison, McDowell

• 6 percent: town of Franklin, Watauga

*Jackson County has proposed an increase to 6 percent.

 

Collection rate for Swain

• 2006-2007    $305,352  

• 2007-2008    $320,820  

• 2008-2009    $309,802  

• 2009-2010    $335,353  

• 2010-2011    $352,437

 

Share your opinion

The Swain Tourism Development Authority board meets at noon on the last Wednesday of each month at the Chamber of Commerce. This month, however, it will be held Jan. 18.

Macon County might postpone revaluating property — again — from 2013 to 2015, a remarkably different response to the crushingly bad housing market than Jackson County is taking.

Richard Lightner, longtime tax assessor for Macon County, said there simply hasn’t been enough property changing hands to set meaningful property values. And most importantly, he said, it would be difficult to set accurate values that Macon County could adequately defend from costly legal appeals. Property owners who disagree with a county’s revaluation have the legal right to challenge on a state level.

By waiting, more selling and buying will have taken place, though Lightner emphasized there’s no crystal ball he’s holding that allows him to read the future — and no guarantees that the market will be better then. Still, just by adding years to the process, one can safely assume some pieces of property will have sold, he said.

Macon and Jackson are similar on the tax fronts because of the communities of Highlands (in Macon) and Cashiers (in Jackson). Both communities are dominated by high-priced, multimillion-dollar homes, at least pre-recession prices. Those homeowners currently shoulder the bulk of the tax burdens in both counties. In Jackson County, by way of example, 57 percent of the tax base is located in just two townships: Cashiers and Hamburg, both in the southern end of the county.

Here is the key issue for taxpayers, the why-you-should-care, bottom-line point: Macon, by likely postponing a revaluation until 2015, would keep the tax burden predominantly on its higher-end residents in Highlands, and spare tax increases for the short term to the county at large. Jackson, by comparison, is looking still to do its revaluation in 2013, which means revaluated property, coupled with a revenue-neutral budget would, almost inevitably, shift the tax burden from the Cashiers area to the less-affluent areas of the county.

“It seemed that most of the pushback about delaying beyond 2013 came from taxpayers in the southern end of the county,” Jackson County Manager Chuck Wooten said in explanation. “Property owners in the southern end could see larger declines in tax value while those in the northern end will see smaller declines, which could result in less taxes for the citizens in the southern end versus more taxes for the northern end.”

Revaluations in North Carolina must take place at least every eight years. Jackson County has the option of pushing back until 2016. Macon County must do its revaluation by 2015.

What’s not in question is what revaluation will mean for both counties: declining values when compared to the boom housing years. Jackson County did its last revaluation in 2008, and Macon County in 2007. Both counties opted to postpone revaluation past a four-year cycle, which they’d gone to because escalating land prices were causing sticker shock to taxpayers. This means Jackson County is using property values set in about 2007, and Macon County is using property values determined in 2006.

New values would mean “the $150,000 home on one acre would probably go up; undeveloped land and more expensive home will have a decrease,” Macon County Commissioner Kevin Corbin said in a recent meeting on the revaluation.

And that would shift the tax burden.

“I don’t have a problem with that per se,” said Macon Board Chairman Brian McClellan, who lives in Highlands and works as a financial advisor there. “If a big house loses value, they should get a tax break. My issue is, if we don’t have good comps, then we don’t want to be at risk defending a lot of revaluations we might not be able to defend.”

Corbin said that he does have some questions about whether Macon County should just go forward, like Jackson for now is set on doing, “and let the chips fall where they may.”

“When is our economy going to return? Maybe we are living in the new normal,” Corbin said.

Macon Commissioner Bobby Kuppers, a U.S. Naval Academy graduate and former commander of a submarine, said the board should be clear in the message it sends to the county’s citizens.

“I think we can say, with some degree of certainty, where those chips are going to fall,” Kuppers said. “If we do the revaluation (in 2013), we owe it to the people of this county to warn them, ‘Incoming Chips.’”

Lightner added, “Those people you see at the grocery store or getting their car fixed, the burden of the chips are going to fall on their laps.”

Commissioners Ron Haven and Ronnie Beale indicated they would support postponing the revaluation.

“The people this would hit the hardest are the very people who can least afford it,” Beale said.

A vote by commissioners is expected in Macon County next month.

In Haywood County, the tax rate would have to bump up three cents for the county to bring in the same amount of money as last year.

Overall, the property values in the county were down following the recent revaluation, the first countywide appraisal in five years. To offset the slightly smaller tax base, the county would have to raise the tax rate from 51 to 54 cents.

County Manager Marty Stamey presented the budget to county commissioners at their meeting Monday, where he painted a picture of fiscal austerity.

“We’ve got less people working than in ‘05 and we’re doing the same amount of work, in some cases we’re doing more work,” said Stamey. “This is the new norm, doing more with less.”

Here’s what the new tax rate would mean based on how your property performed in the revaluation:

• For residents whose property values dropped by at least 5 percent, tax bills will be less.

• Those whose values were perfectly stagnant will see around a 5 percent increase. So for a home valued at $100,000 — both in 2006 and this year — the bill will go up by $27.

• Properties that increased in value will also see a hike in their tax bill by about the same percentage.

Throughout the budget process, commissioners have said they’re committed to a neutral tax rate.

“I think that’s fair because the county’s taking in the same amount of money if they’d not done a reval,” said Commissioner Kevin Ensley. “I don’t know any other way to do it, except keep [the rate] the same, and then we’d have to make a lot more cuts than we have now.”

“We’ve made cuts the last three years and it’s bare bone,” said Commissioner Bill Upton.

While the property tax side of the budget will remain constant, wilting sales revenues mean the county will still have to make some cuts. Most notably, education — both Haywood County Schools and Haywood Community College — will be slashed 3-percent.

Sales tax is the county’s other main money spinner — it accounts for 15 percent of revenue — and it’s down 3 percent over last year. Thus the cuts to schools, which claim a large share of the county’s budget — about 25 percent of the county’s entire budget goes to education.

While a 3-percent cut may sound small, it is indeed a hit, given that the school system asked the county for an increase on what they were given last year. Instead, they’re now losing $430,000.

Stamey said he realized the schools’ need and asked them to dip into their fund balance to cover their losses from state and local defunding.

“These are difficult decisions, ones that we don’t like to make, but we have to do it to keep a revenue neutral budget,” said Stamey.

For the schools to get that money back, commissioners would need to tack another two thirds of a penny onto the property tax rate.

Commissioners will hold a public hearing on the proposed budget at 5:30 p.m. on Tuesday, May 31, with a vote scheduled for their regular meeting at 5:30 p.m. on Monday, June 6.

 

Haywood County’s tax rate versus tax base

Tax base before revaluation: $7.258 billion

Tax base after revaluation: $7.086 billion

2010 tax rate: 51.4 cents

2011 tax rate: 54.13 cents

 

What is revenue neutral?

A revenue-neutral tax rate means the county will bring in the same amount of revenue despite changing property values. Usually, property values increase so the tax rate can come down. But property values on average went down slightly in the recent countywide revaluation. The tax rate will go up to compensate for the smaller tax base.

The official revenue-neutral tax rate allows for a minor increase from newly built homes and buildings that are added to the tax base year to year.

No increase in taxes, more funding for the new public library, the same amount for the schools and a more than 3 percent overall drop in spending highlight Jackson County’s proposed budget for the upcoming fiscal year.

Does the proposal simply sound too good to be true? Well, it’s not, interim County Manager Chuck Wooten reassured commissioners this week when presenting the fruit of Finance Officer Darlene Fox and his labors.

The proposed budget would total just more than $58 million; the general fund would come to just more than $49 million. A budget work session is set for 1 p.m. on Monday, May 9, when commissioners meet with the Jackson County Department of Social Services. At 2 p.m., they will walk through the proposed budget with Wooten to determine what, if any, changes they want to make.

“We just trimmed every department,” Fox explained before the meeting while passing out copies of the budget to reporters.

County employees won’t see a pay increase for the second consecutive year, and there is a net decrease in county employment by 17.1 positions (through elimination of open positions, consolidation of some duties, and privatizing some of the solid waste operations).

Additionally, Jackson County would give the school system the $235,000 extra in capital outlay administrators requested recently. School leaders said during a work session with commissioners that the money was necessary to fix roofs, buy security cameras and meet other basic facility needs.

School board members and administrators also requested commissioners hold steady at the same nearly $6.8 million amount budget this year, which is accomplished under the proposed budget.

The new Jackson County Public Library in Sylva would see funding increase from $500,000 to $675,000.

Mary Otto Selzer, who attends virtually every commission meeting, including this one, was pleased with the proposal. She is the co-chair of the Friends of the Library committee that raised nearly $2 million in donations and grants to furnish and outfit the new library. The former investment banker praised the working budget for containing sufficient funds to keep the library operating at 45 hours per week.

“The county and community have made a significant investment in this new facility and we want to have it open and accessible to serve the communities needs,” Selzer said. “The community had hoped our new library would be able to increase its hours of operation from 45 to 60 hours per week  — the minimum level recommended by the state — but this is wonderful news in view of the current financial climate.”

Selzer said Librarian Dottie Brunette is working to set the hours of operation for the new library complex (they are in process now of moving the libraries books and other resources to the building). Brunette, Selzer said, is hoping to offer at least a couple of days with evening hours to better serve working families.

Funding for nonprofits in Jackson County was held at current year levels. New dollars amounting to $7,000 was provided for Mountain Projects; Webster Enterprises has new funding in the amount of $10,000; and The Community Table, which requested $10,000, was recommended for $5,000.

“It’s not a surprise – it’s a tough economic climate,” said Amy Grimes, executive director of The Community Table, a group helping feed those in need. “Anything we can get in the form of financial assistance is a help.”

Wooten said the financial climate seems to be improving.

“Jackson County continues to feel the impact of the economic slowdown even though some signs suggest things may have bottomed out,” Wooten wrote in his introductory remarks to the proposed budget. “Foreclosures are up and building permits are down; but, overall, it seems we may be witnessing the beginning of a slow recovery.”

Wooten noted that while the ad valorem tax rate of 28 cents would remain the same, and that the fund balance (the county’s rainy day fund) would go untapped, “overall the projected ad valorem tax value and revenues are less than were budgeted in fiscal year 2010-2011.”

The projected tax base is $11,323,240,141, or $74.5 million less than the current fiscal year.

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