County Manager Proposes Five Cent Property Tax Increase

County Manager Proposes Five Cent Property Tax Increase Featured

By / Local News / Wednesday, 06 May 2015 04:00

By WILLARD KILLOUGH III
Managing Editor

NEW HANOVER CTY - New Hanover County Manager Chris Coudriet delivered a proposed budget for the upcoming 2015-2016 fiscal year at the County Commissioners Monday May 4th, meeting.
The sticker shock was a proposed five cent property tax rate increase to help pay for multiple bond referendums approved by the voters since 2006.
The Board scheduled a budget work session for May 14th, at 2PM prior to the Board's regular agenda review meeting.
Coudriet said, "It's not a secret that I'm asking or recommending to the Board to raise the property tax. I could only do that knowing with 110% confidence that we had analyzed literally very line item and driven out unnecessary cost."
He said the $306.6 million  dollar budget presented is consistent with the direction of the Board based on prior meetings in March and the 2011 strategic plan.
He said there are many things that prior Board's of Commissioners, "Have done to make things better... and we are continuing meet those obligations as well."
Coudriet explained to the Board, "It is my administrative opinion the only sustainable path forward to deliver on the County’s strategic direction, address the Board’s priorities, satisfy prior Board obligations, and protect the viability of County programs, is to ask the Board to adjust the property tax rate. Specifically, I am recommending the Board raise the property tax by 5 cents. If accepted, this would establish a New Hanover County property tax rate of 60.4 cents per $100 of assessed value."
He explained, "New Hanover County’s property tax is mostly unchanged since FY08-09, which includes the 1.3 cent tax increase in FY10-11 for lost revenue after the recession, and the revenue neutral tax rate for the current 55.4 cents established after the 2012 revaluation when the County lost approximately 15 percent of its property tax base. In the same time, the County has begun to pay fully on the $182 million in bonds the voters approved in 2006 and 2008. Today, the County’s effective property tax rate is 51.70 cents and not the actual rate of 55.4 cents."
He explained the proposed property tax rate of 60.4 cents, is in a competitive position as compared 15 other urban North Carolina counties.
He explained, "The basis for the proposed property tax increase is to exclusively service debt obligations the County currently faces for voter-approved bonds in 2006 and 2008. In 2006 67% percent of those voting approved $18 million for mostly unincorporated park development, and in 2008 62% percent of those voting approved $164 million for new Cape Fear Community College (CFCC) facilities. In FY15-16 the County will pay fully on the 2006 and 2008 bonds at a cost of $15+ million."
He explained, "Every new dollar raised will be accounted for and spent only on voter-approved debt. It is
not my ask or my intention for any of the proposed tax increase this year or in the future, to go toward funding general operations of the County government — only voter approved debt."
Commissioner Woody White explained, "A 5 cent tax raise is an immediate transfer by a vote from this body of $15 million dollars from the local economy into our checking account as a local government and that's the wrong thing to do." He said, "Particularly when we believe, at least I do, with cash management, looking at our projections, holding the line on spending and doing the things we can do and take advantage of the unique situation we are in which is a growing [tax base] and all of these projections moving in the right way and maybe with the benevolence of the Local Government Commission (LGC) that we can do it without raising taxes."
He said, "When voters approve bonds - I think there's the context of what staff and some others believe that to be - is that they are
approving a tax raise. I tell you now, I talk to a lot of citizens that say 'I vote for bonds but I also expect my commissioners to budget within the confines of the money that they are given and within the parameters of the increases in revenues that they enjoy every year without raising my taxes."
Part of the budget presentation showed the proposed tax increase bringing New Hanover County more in line in comparison to tax rates of other "peer" counties in North Carolina.
White said, "I am proud of that and that is not a justification in my opinion for raising taxes to get closer to some of our peers. The further we are apart form our peers on that metric the better it is for our local economy and our citizens."
Commissioner Skip Watkins explained, "Similar to Commissioner White, the last thing I want to do is vote for a tax increase especially thinking that half of our county population is going to enjoy a two and half to three cent tax increase from the Wilmington City Council as well. While that is not our purview. That's not our responsibility. I still think we need to be aware of that extra coming out of the city residents pockets as well."
Watkins said he wants to talk about some of the budget line items to look for ways to save money. He said, "I think our citizens sometimes have a disconnect between when they vote for a bond and the fact that the bill is going to come due some day."
He said educating the voters on the future impact bonds have on the property tax rate is important.
There have been $342 million dollars in bonds issued over the last 8 years since 2006.
Commission Chairman Jonathan Barfield said, "There's a phrase that everybody wants to go to heaven but nobody wants to die. And everyone comes to our community wanting certain amenities and at the same time those amenities must be paid for. I have a hard time believing that voters in our community are that naive that they are not educated enough to know that if they pass a total of $342 million dollars worth of bonds that they don't have to be paid for. I give the citizens of community much more credit than that."
He said voters were very aware of the future impact recent transportation and school bonds would have on their tax rates when they gave approval at the polls last November.
Barfield said, "I've been on this Board going on seven years now and in that time frame we've only raised taxes one time and that was
by 1.3 pennies. There was one year I voted against the budget because it did not have a tax increase to cover the bonded debt that was issued for Cape Fear Community College. The argument I had with my colleagues then was, you can't continue to issue these bonds without paying your bills."
He said, "When I hear people talk about they are fiscally conservative I really don't know what that means. Because fiscally conservative does not mean you don't spend money, that means that you get a good return on your investment. When I look at the dereliction of duty of past Board's who called themselves fiscally conservative but allowed Wastec to go to utter ruin and disrepair to where it cost the taxpayers millions of dollars, that's not being fiscally conservative."
Commissioner Beth Dawson said she wants staff to take a harder look by double checking figures and checking to see if some county debts could be refinanced or converted to interest only loans.
She urged staff to review the proposed budget to ensure they know what they have to pay in terms of "wants" verses "needs" and prioritize those items. She said, "Then we know what we need to pay for and our responsibilities to the public to provide the services that we all enjoy."
The County Board of Commissioners will vote to adopt a budget prior to the start of the 2015-2016 fiscal year on July 1st.

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