Nags Head still wrestling with tax question
Town employees were on the minds of Nags Head commissioners Monday night as they continued to weigh the merits and consequences between a 1-cent and a 2-cent property tax increase.
Complicating discussions not only in Nags Head, but among all the local governments, is trying to predict what the other towns and Dare County will do because the distribution of sales, occupancy and land transfer tax revenues is based on their property tax rates.
In essence, holding steady on a property tax rate could penalize a town if others raise theirs.
The tax rate for the coming fiscal year has split the Nags Head commissioners between a 1 and 2 cent increase as they look at a budget that either way would freeze about a dozen positions and further cut employee’s benefits.
Commissioner Doug Remaley even proposed a 2.25-cent increase rather than the 1 cent in Town Manager Cliff Ogburn’s budget recommendation, which includes no new programs or construction.
“He’s not proposing anything,” Remaley said. “This is a maintaining, bare-bones budget.”
Commissioner Ann Sadler resumed the push for a 2-cent increase, saying “we just are not looking past our nose.”
She said that employees are taking the brunt of budget cuts and that the town is doing no planning for the future, such as setting aside money to match funding for the multi-use path on U.S. 158.
Ogburn said he could make a $10.8 million spending plan with a 1-cent increase work, but “this isn’t a budget with any vision.”
Some commissioners noted that the town has raised the tax rate only 4 cents in 13 years.
There was no formal consensus on the tax question during Monday’s work session.
One thing commissioners did seem more inclined to approve was giving each employee a one-time $700 market adjustment, which would cost the town a little over $101,000. Mayor Pro Tem Wayne Gray has advocated taking the money from the town’s undesignated fund balance, basically its savings account, to pay for it.
But Sadler said she didn’t want to take any more money from reserves. The budget already calls for pulling out $425,000.
Ogburn said tight staffing is hurting morale more than reductions in benefits, particularly in the fire department. Under the current proposal, the department would have to do without two positions and figure out a way to stretch minimal personnel to cover shifts when someone is out sick or on vacation, Ogburn said.
Commissioners did authorize Ogburn to fill the fire marshall vacancy with a firefighter. The fire marshall position opened up when Kevin Zorc was named chief. The fire marshall is in charge of inspections and education programs.
Finance Officer Kim Kenny offered a bit of encouraging news when she adjusted revenue projections for occupancy tax revenue upward by $70,000 based on signs that rental reservations for the season are better than expected.
On the flip side, she provided a scenario that showed Nags Head losing about $60,000 in the fiscal 2011-2012 distribution of sales, occupancy and transfer tax revenues if it stuck to the one-cent increase and Dare County, Kill Devil Hills and Southern Shores raised their taxes more than that.
Southern Shores has proposed a 4.25-cent tax increase, 3 cents of it for a capital improvement fund. A budget recommended by the Kill Devil Hills town manager calls for 2-cent increase, but commissioners last week were unanimous in saying they would not raise taxes.
According to Kenny’s figures, Southern Shores could receive over $400,000 more in the sales, occupancy and land transfer tax distributions in fiscal 2011-2012 than it does now.
The town will hold a public hearing before voting on the budget, which must be approved by June 30.
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Bobby says:
Pass the 2 cent increase and let’s keep moving the town forward. It seems to me that most if not all the fat has been cut in previous years. (Although I am sure that someone will disagree). Let’s do what we need to to provide the services that both the visitors and the locals need!
KHer says:
I agree. Pass the 2 cent increase. I’m a Nags Head property owner and want to see a fully staffed fire department answering my call and those of my neighbors.
Jed says:
2-cents isn’t even close.
You are planning to maintain the nourishment project (this maintenance is ON TOP of the money from county, the Special Tax District and the Occupancy Tax = those funds only pay for the initial sand dump)
VA Beach/Sandbridge maintains a similar project (smaller), and it costs them an additional 12-cents per $100 just for maintenance. You might want to address that now too.
Filbert says:
Bobby and KHer I agree with you both. I am a property owner in Nags Head. The thing is letting our Board of Comissioners know how we feel as tax payers. Drop them an e-mail at allmayorcomm@townofnagshead.net If we keep cuttting we are only going to hurt ourselves as tax payers.
Stewie says:
@Jed – the Sandbridge Special Tax District is only $.06 more than the normal tax rate NOT $0.12 ($0.95/$100 vs $0.89/$100)
Jed says:
I got .12 from Surfrider, is that wrong?
“Beach fill at Sandbridge Beach in Virginia Beach (first fill was in 1998, costing $8 million) is funded through a Special Service Tax District where property owners pay an extra $0.12 property tax per $100 assessed valuation for beach fill.”
Bobby says:
Did you replace your tires on either of your cars this year? Any oil changes? Did you experience hardship when gas prices spiked? Did your health insurance increase in its premium? Do you BENEFIT from tourism and rental/second home owners? Well, what do you think the town and county experienced? The same things. Hey the more you want to stop change the more the change will occur and pass you by. I am willing to pay my fair share to keep the town and county moving forward and able to provide the necessary services. I want to be a problem solver not a finger pointing naysayer. Forget about politics commissioners and move forward like you were running a large business and seek the funds you need to be effective. Lend a deaf ear to those that think that they can do a better job than you like a Monday morning quarterback spewing around the water cooler.
Jed says:
Bobby, like a few others, has fallen prey to the sand propaganda campaign.
The simple fact is: tourism will continue to grow even if we did nothing, not even a planned, strategic retreat… why?
Because we add more lodging each and every month than we could ever lose.
Bobby says:
No, need to characterize me Jed. Let’s just agree to disagree. Change is inevitable whether you want it to happen or not. I fail to see all this construction you claim is going on but then again I am a working man and don’t have time to troll to find it. Seems to me you are talking more about years ago. I am pro progress and pro beach preservation but got rid of the rose colored glasses a long time ago. Either way, if tourism continues to grow then the town will need to expand and taxes will need to be raised appropriately or what?
Selena K says:
The math simply doesn’t add up as far as the Beach Nourishment issues for me–spending $3,000,000 a year to save $1,700,000 a year in tax revenues? I just don’t get that.
The Town needing more tax money to provide we NH residents with proper services, though, I do get.
Bobby says:
I guess it wouldn’t if you didn’t add up all of the money generated by the visitors that we would lose
. Then you have the domino affect….you know loss of jobs, restaurant revenue and taxes, grocery sales and taxes, etc. Commissioners……please preserve our beaches!