Billjames.org Newsletter

May 23, 2007

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Democrats mull another tax increase

It is a cliche' to say that Democrats only goal in life is to increase taxes but there is a truth in reality. Since 1998 Democrat controlled county Commission boards have raised taxes a total of 29 pennies for each $100 increase in the assessed value of your home or business.

During the 'State of the County speech the current chair, Jennifer Roberts committed to 'try and avoid property tax increases' for the next two years. Her specific quote was:

"Most important, we must work to sustain a stable and fair tax rate. For this term, it is my goal to try to avoid property tax increases." - March 9, 2007

Of course, how much of a goal or how much effort the Democrats will exert on this 'priority' shall be determined next week. The goal couldn't have changed much from March 2007 to today but like a lot of politicians the question is whether it was a boilerplate phrase to appear fiscally conservative or whether it had real meaning.

The need for tax relief as the Chair indicated above is real. The question is whether the Democrats will collectively work with the GOP to craft one. As far as I can tell, the four GOP are ready and willing to join Chairman Roberts in crafting a budget that 'avoids tax increases'. Historically however the Democrats have crafted their budgets alone, refusing GOP suggestions. More often than not over the last 10 years, one of the leading Democrats (Usually Parks Helms or Dumont Clarke) would appear with a paper with all of the Democrats adjustments. Only the Democrats would get this 'crib' sheet which was used to let everyone know how to vote. The process was predetermined.

Here is a chart that summarizes this history of tax increases.

Year	Old rate	New Rate	$ Increase	% Increase	Who Voted to Increase your taxes?
1998	65.0 cents	68.5 cents	3.5 cents	5.38%	Democrats
1999	68.5 cents	73.0 cents	4.5 cents	6.56%	Democrats
2001*	73.0 cents	83.97 cents	11 cents	15.0%	Democrats
2003**	Revaluation	73.64 cents	NA	NA	Rev. Neutral
2004	73.64 cents	75.67 cents	2 cents	2.75%	Democrats Plus 1 Republican
2005	75.67 cents	83.68 cents	8 cents	10.6%	Democrats
	Total Tax increase since 1998		29 cents
* In 2001, the Democrats raised taxes but also increased the sales tax rate by 1/2 cent in the fall of 2002. The Republicans campaigned in 2002 on reversing that 1/2 cent tax if elected and promising to offset the effects of the sales tax increase against property taxes if it could not be eliminated. **In 2002 the GOP took control and during the 2003 budget a revaluation was required. The GOP set the new property tax rate at "revenue neutral" for both property and sales taxes meaning that it was set about 2 and 1/2 cents below 'property tax revenue neutral' to account for the sales tax increase noted above. The Revaluation rate of 73.64 cents is "revenue neutral" considering BOTH property and sales tax revenue.

Over the next week or so the Mecklenburg County Board of Commissioners will be working to draft a budget. The County Manager has proposed a tax increase of an additional 3 cents (roughly $30 million in new tax increase money).

Cutting $30 million from the Managers budget is not a tough problem. There are ample ways to achieve this with minimal 'pain'.

We shall know next week whether the 'goal' is something more than lip service.

Sincerely,

Bill James
Billjames.org

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