Editor’s forum: Get ready to open your checkbook
Some argue that that 2 cents per $100 of value is just $60 a year on a $300,000 house. But add that to increases in electric rates, water rates, health-care costs, groceries and gas and the coins begin to pile up.
In the past, I’ve been ready to accept a modest increase if the reasons were well explained, it would avert laying off people who are doing a good job and it didn’t become a habit.
Even in Nags Head, where I live, I talked myself out of getting too worked up over a tax increase last year to help pay for pumping sand onto the beach. But the indirect economic benefit to people like me with no property on the oceanfront is so indirect I haven’t noticed it yet.
This year, I’m trying not to get too worked up over the hiring of an employee in a brand new, high-level position with responsibilities I can’t quite put my finger on. Apparently my tax increase left enough spare change to spend on something other than sand.
Other towns cited last year’s tax increase in Nags Head of 2 cents for everybody and another 16 cents along the oceanfront as one reason for upping their rates this year.
Distribution of county land transfer, sales and occupancy tax revenues are based on town property tax collections. So the more one town taxes, the bigger a share it gets — at the expense of the other towns that depend on that money to balance their budgets.
That sets off a chain reaction of tax increases as towns try to recoup the money they lost from another town’s tax increase. So now people in other towns feel like they are subsidizing Nags Head’s “go it alone” beach nourishment project. This year, rates in Kill Devil Hills, Kitty Hawk, Southern Shores and Manteo went up 2 cents.
Next year’s revaluation might end up as a blessing in disguise for elected officials, who have pretty much tapped out the it’s-the-other-town’s-fault excuse.
When oceanfront properties are hugely devalued, they no longer will subsidize westside properties, where most of the voters live. That presents a new political problem, but also a new excuse.
Values overall are expected to decline an average of 30 percent, so towns and counties will be obliged to use a revenue-neutral tax rate as a starting point on their budgets. That is the theoretical rate that would generate the same amount of revenue on properties that overall have lost value.
Rates will be higher, but some people will actually pay less — mainly on the oceanfront — and others will pay more — mainly on the west side. Get ready for the pitch that the higher rate doesn’t necessarily mean you’ll be paying more. Or that it’s no one’s fault that the national economy sent property values in decline.
Unless you’re willing to sit down with a calculator, you really won’t know anything for sure until you get your tax bill. By then it will be too late to protest and elected officials will be off the hook. The whole thing will be so confusing that no one will know what to protest even if they wanted to.
That still leaves the weird method of distributing county tax revenues.
Some argue that asking the General Assembly for a change would invite lawmakers to eliminate the occupancy tax — at best a weak counterpoint since that would alienate most of the counties in the state.
A lot of public officials complain about the formula, but no one has made the slightest attempt to change it.
Maybe it’s still too convenient an excuse for raising our taxes.
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