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Wednesday, 30 June 2010 15:04

Cashing in the cash settlement for property tax holiday lacks traction among Swain leaders

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At a special session of the Swain County board last week, Commissioner David Monteith stood up and stunned the crowd with a controversial proposal for spending the North Shore Road cash settlement money.

Monteith called for a one-year suspension of property taxes for Swain County residents and a 3 percent raise for all county employees. Businesses and county commissioners would be exempt from the tax holiday, however.

Monteith estimates his proposal would scoop about $4.5 million out of the $12.8 million the county has gotten so far.

But doing so would dip into the principal of the road settlement money, a step that requires approval by two-thirds of registered voters in Swain County. Without such a referendum, commissioners are only allowed to spend the interest from the settlement, which is held in a special trust fund by the N.C. Treasurer.

Monteith said the tax break would be extremely helpful during these rough economic times.

“I know people are struggling...what better way to give citizens a break,” said Monteith.

It would also guarantee that the cash settlement benefits every taxpayer of Swain County.

Fellow commissioners were left flabbergasted by the proposal, which was brought up during a special meeting on an unrelated topic.

“We wasn’t there to discuss that,” said Commissioner Glenn Jones of the meeting. “Why he brought this up, I have no earthly idea.”

Jones and Commissioner Genevieve Lindsay vehemently opposed Monteith’s pitch, while Commissioner Steve Moon said he would only be in favor of spending the interest money to give county employees a raise.

It’s been more than two years since employees have gotten a raise, and they’ve also had to take furloughs without pay. “For a lot of people, that hurts,” said Moon.

However, giving everyone a holiday from property taxes for an entire year is a different matter.

“I could not agree with that and could not go along with that,” said Moon, adding only drastic circumstances would cause two-thirds of registered voters to support spending the principal. “To me, that would seem to be almost an impossibility.”

With at least three of the five commissioners opposed to it, Monteith’s proposal seems likely to die since the referendum requires approval by the board.

Jones stated outright that he would never support a vote by the people to dip into the principal, though he would like to see a committee of citizens help decide how to spend the interest money.

“If you ever did once get into that principal, then it’s gone,” said Jones. “You can never bring that back.”

Leonard Winchester, chair of the Citizens for the Economic Future of Swain County, a group that fought for the cash settlement, says he suspects ulterior motives behind Monteith’s proposition.

“All this is a vote-buying scheme,” said Winchester, citing upcoming elections. “In effect, it says, ‘Vote for me, I’ll give you money.’”

Monteith, who is up for re-election this fall, strongly opposed the cash settlement and was the lone commissioner to vote against it. One of his chief arguments was that commissioners would squander the settlement.

“Now look at who the first commissioner is to make a suggestion that the principal be reached into and passed out,” said Winchester. “It is scary just how far some people will go to try to make the settlement end as a failure.”

Winchester is skeptical that two-thirds of all registered voters will show up to the polls to support Monteith’s idea, and he guesses that Monteith might feel similarly.

“He’s a smart politician,” said Winchester. “He knows this is not going to pass, but he can still get a lot of political mileage.”

Where did the cash settlement come from?

Swain ended a decades-long uphill battle with the federal government this year, and could soon be flush with cash as a result. The federal government flooded a main road through the county for the creation of Lake Fontana in 1943, needed at the time to generate hydropower for the war effort. The federal government promised to rebuild the road, but never did. Instead, it has agreed to compensate Swain County with $52 million through installments in coming years — known as the “cash settlement.”

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