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Serving Princeton, Rosewood, Brogden, E. Johnston Co., W. Wayne Co., North Carolina |
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HeadlinesGrowth drives need for tax revenue BBB warns against foreclosure 'rescue' scams These ladies see a need and get to work RHS vs. Goldsboro: Britt sees victory despite Eagles' 48-0 loss PHS vs. SJ: Younger 'Dawgs take 45-0 loss at South Johnston Football Preview: Bulldogs hope to mix it up as offense improves Football Preview: Aggressive 'Dawg defense will get after them Football Preview: Championship 'rings' up goals for young 'Dawgs Football Preview: Eagle offense looks more comfortable in spread Football Preview: Eagle defense will grow in system, confidence Football Preview: Look for Eagles to improve as year rolls on Schools reach compromise on Clayton bussing Tax referendum will be on November ballot Johnston Co. school lunch cost up this year
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Growth drives need for tax revenueBy Barry Merrill 22 August 2007 — Does Johnston County need alternative sources of revenue to meet the challenges of growth? Would a land transfer tax or an increase in the sales tax ease the burden on property tax payers? Is the land transfer tax a better means of putting the costs of growth on those who are moving into the county? The News Leader asked County Manager Rick Hester and County Finance Director John Massey to help readers better understand some of the issues that surround the advisory referendum voters will be casting ballots on in November. Johnston County Commissioners approved putting a ¼ cent sales tax increase and an up to .4% land transfer tax on the ballot last Tuesday in a special meeting. Either of the two but not both could be enacted, and the ballot is not binding. While both Mr. Hester and Mr. Massey felt good about how the county had dealt with growth issues, and particularly school funding to this point and with the current taxes, they were cautious about the future. “Things can change,” Mr. Hester said. While the county has enjoyed double digit and near double digit growth in sales taxes in recent years, several years back the sales tax growth rate slipped to only 3%. If the economy slips into a recession, that could make it difficult to continue to meet the needs with current tax revenues. To show some of the impact of growth, under current per pupil expenditures, a family moving into Johnston County sending one student to school will cost the county $1561. If that family sends two students to school, the cost would double to $3,122. If that family moves into the average new home in the county, valued at $140,000, ad valorum taxes or property taxes on that home would generate $1,092. Johnston County’s revenues this year will increase by $36.5 million based on sales taxes, or almost 43%. With such factors as tourism spending and growth in the retail sector in the county, it is difficult to translate new residents’ impact on sales tax revenues. Sales taxes will increase, but probably not as much. Providing school buildings and teachers, along with college facilities, and servicing education related debt will consume a projected total of $83 million or very nearly half of the total county budget, other services are stretched by growth, including law enforcement, emergency medical services, and recreation. Those increased costs are harder to measure as relates to a new family moving into the county. Mr. Hester pointed out that there were still some bills in Raleigh that could change the county’s revenue picture. He and Mr. Massey said they were still looking at the impact of the state taking on Medicaid expenses that had been shouldered by the county, but they also had taken back some of the county’s sales tax revenues. That is a four year changeover. Mr. Hester noted that since the county had increased the tax rate from 84 to 85¢ in 1998-99’s budget, the county has not had to increase the rate. The county has passed four bond issues during that period, in 1999, 2001, 2004, and earlier this year. County spending on current expenses for education has also increased to just above the state average in recent years. Standard and Poors, who provides bond ratings based upon the ability to pay back bonded indebtedness, raised the county’s bond rating earlier this year, improving the county’s ability to sell bonds at lower interest rates. They hope to win a similar endorsement from Moody’s, another bond rating company next year. Some county commissioners have worried about spending down reserves in the current budget, and the impact that might have on bond ratings. Mr. Massey said while the Council on Government recommends counties retain an 8% fund balance, bonding companies like a 15-16% balance. Mr. Massey said the bonding companies were not overly concerned about going under the 15-16% unless there was no planned movement to replenish the surplus. Mr. Hester praised the county’s several years ago bringing in Davenport, Inc., a third party assessor of finances who helped with providing information important for the bond rating. He also praised the schools’ bringing in OR/ED, a Raleigh based firm that advised on land use and where to put new schools to meet growth in the county. “I think we have a good system in play,” Mr. Hester said. Mr. Hester offered that he would not be surprised if the county commissioners did not immediately enact either of the tax issues if approved by voters, but held them as “tools in the toolbox” to meet future needs.
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