Opinion Piece Submitted to Albemarle Observer...but they chose not to publish

In council deliberations, which were very thorough and thoughtful while examining each line item, the macro picture was never discussed and the revenue neutral tax rate of 35 cents was not mentioned.  (Note: state law requires this figure to be published…in my opinion it should have been in Corey’s budget proposal to you).   Instead the focus of the committee seemed to be that cutting 1/2 cent from 45.5 was the goal.  But this will only reduce the tax hike by $45,000 out of the $867,000 increase.  Ideally after a revaluation the tax rate should be cut to   revenue neutral, 35 cents, so the median taxpayer pays the same property tax amount as last year…not a 28% increase.

Councilman Sellers replied to me for the other members present, Mayor High and councilmen Dixon and Turner.  His response indicated that this was due to:

1) higher salaries for town employees, these were raised significantly after last year’s salary study.  ($232,000)

2) increased cost of health care for town employees ($211,000)

3)Project Teapot, for the Provalus company to occupy 211 South Broad Street to generate jobs/boost the economy ($321,000)

The total is $764,000.  In summary he indicated the council wants to provide the same quality services the town has always provided and cutting services was never considered.

It is disappointing that both the county and town have been unwilling to reduce tax rates after so large an increase in property valuation.  I have learned that this is now more often the case in North Carolina—two thirds of local governments use revaluations as an opportunity to increase taxes above revenue neutral and now that we are one of the few counties in northeast NC to revalue every four years we can anticipate this to be the case twice as often as our neighbors from now on.  My question is: what will our leaders do if the economy falters and property values decline next time?  Raise taxes to ensure revenue remains the same?  This is not impossible.

Chowan County has reported that sales tax revenues are 10% below expectations.  It will not be surprising if higher property taxes result in even lower spending in the local economy as household budgets must adjust to accommodate higher taxes.  My spendable income will drop about $150 a month.

Any taxpayer can figure how big the bite will be by going to the Tax Calculator at robinsams.com.  (On the landing page scroll to the bottom and click on “Edenton.” ) It reflects the Edenton tax rate of 45.5 cents along with a county rate of 60.25 cents. The formulas will be updated when tax rates are finalized later this month.

 I’ve done many of these calculations and generally the houses in the $200-300,000 range seem to have the highest percentage increase.  The county’s calculation for revenue neutral can’t be accurate as 90 percent of all houses have a tax increase at that rate. 

As I have written before a tax on non-income producing property you own is a “wealth tax” or “government mandate” on unearned income, and it hurts most those on fixed and low incomes, who will not benefit from any of the three reasons cited for the tax hike, but they will definitely feel the bite.

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Not submitted in the Opinion Piece for publishing in the Albemarle Observer, but sent to each council member who participated in the Budget Workshop:

Sellers had the highest increase!  The Habitat homeowner on Oakum S had the second highest...Habitat homes are built and sold to folks whose family income is half of the county average.