Revenue-neutral revolt: Local government budgets under scrutiny
A countywide property reappraisal earlier this year generated substantial increases in property value for many homeowners, who will now have higher tax bills despite lower tax rates. Taxpayers and elected officials on two local governing boards aren’t happy about that.
“I was hoping that we could balance the budget and stay revenue neutral, which looks like it’s gonna be tough to do, but I guess I’m still holding out that we could give it a little more time and possibly do that,” said Brandon Rogers, a Haywood County commissioner who voted against the proposed budget on June 7.
For most local governments, property tax revenue is the single largest source of revenue each year. Property tax bills are generated by multiplying the tax rate, expressed in cents per $100 of assessed value, by the assessed value. Usually, tax bills rise and fall based on the rise and fall of the property tax rate, but when property values rise — and the rate stays the same — bills go up.
That’s why elected officials on all five local governing boards in Haywood County looked long and hard at needs and wants and ended up proposing lower property tax rates. Those rates, however, aren’t “revenue neutral,” meaning they’ll still generate more revenue than in previous years due to higher bills paid by property owners.
Haywood’s tax rate last year was 58.5 cents. A revenue neutral rate that would have kept tax bills the same for the next budget year is 50.7 cents. Haywood commissioners opted to go with 53.5 cents, largely to fund the recommendations of a forthcoming pay study that all agree will show county employees as underpaid based on their experience and performance.
“It is because of my commitment to a neutral rate that I cannot vote for the proposed budget today,” said Haywood Commissioner Jennifer Best, who joined Rogers in opposing the proposed budget. “The need to increase wages for employees is one of our major driving factors in this year’s budget and unfortunately counties and municipalities often balance their budgets on wages, salaries and benefits.”
While Republicans Rogers and Best expressed support for the pay increases despite voting against the budget that would fund them, fellow Republicans Tommy Long and Kevin Ensley voted for it. Lone Democrat Kirk Kirkpatrick was the swing vote, pushing the measure over the top.
Best said it was the most difficult decision she’s had to make since being filling the seat of former Commissioner Mark Pless, who left to become a member of the N.C. House, but the new tax rate does mean that only 15 out of 100 counties in North Carolina have a lower rate than Haywood does.
A day after the Haywood meeting, the Town of Waynesville found itself in a similar situation.
Waynesville’s proposed budget looked to be a shoo-in for easy passage during the June 8 budget hearing, but a number of public comments opposing the tax increase derailed the vote.
Currently, the town’s tax rate is 49.57 cents. The revenue neutral rate would be 41.27 cents, but the budget proposal lists 45.45 cents as its preferred rate.
That, said Pigeon community resident Phillip Gibbs, would be a severe blow to people on fixed incomes.
“I want to make an appeal to the board to be conscious of the fact that we are mostly seniors and we are on fixed incomes,” Gibbs said. “I will not get any more money — next month, next week, next year — than I am getting right now. We’re having a hard enough time paying our taxes as they are. Now, I know the town needs money to operate, but please be aware of the fact that a lot of senior citizens can’t afford this.”
Waynesville resident Joey Reece also opposed the increase, but for different reasons than Gibbs.
“Let’s take a look at this budget from a 50,000-foot view. Tax revenue’s up dramatically, 13 percent or about 750,000 this year,” Reece said. “We’ll be the recipients of roughly $3 million in federal stimulus money, the Plott Creek apartments will add another $60,000 next year. Looks to me like the tax base increase is substantial and this has come about even during a global pandemic.”
Reece went on to lament local job loss, businesses closed, the $300 federal unemployment supplement likely ending soon, along with the federal foreclosure moratorium as reasons why now is no time for a tax increase.
“Do the right thing,” he said. “Cut the rate to a revenue neutral rate.”
Aldermen Chuck Dickson and Jon Feichter then called for the budget vote with the 45.45 cent rate to be postponed and asked town administration to prepare a presentation on what a revenue neutral budget might look like.
They’ll entertain that proposal during a special called budget meeting that will take place on Wednesday, June 16 at 10 a.m. at town hall, 16 S. Main St., in Waynesville.
By law, local governments have until midnight on June 30 to pass their budgets for the upcoming fiscal year, which runs from July 1 through June 30.
The Town of Waynesville will conduct a special budget workshop meeting to reconsider its tax rate before entertaining the passage of its next budget. The meeting is open to the public.
- Time: 10 a.m.
- Date: Wednesday, June 16
- Location: Town hall, 16 S. Main St., Waynesville.