My turn: On the backs of local families

Published 1:19 pm Friday, May 6, 2016

Under the 2009-10 budget, Beaufort County collected $25.3 million in property taxes and $7.2 million in sales taxes from the county’s 18,500 households and 47,759 residents.

WARREN SMITH

WARREN SMITH

Under the 2015-16 budget, Beaufort County expects to collect $32.9 million in property taxes and $7.9 million in sales taxes from the county’s 18,500 households and 47,651 residents.

The burden of county spending, ultimately paid for by local taxpayers, rose from $1,750 to $2,200 per household per year in just six years.

Since 2013, county revenues from ad valorem taxes, sales taxes and supplemental state and federal transfer payments have plateaued at around $56.5 million, but spending for the current year has accelerated to $59.1 million and is now running $2.6 million in the red. In a single year, county spending managed to surpass its prior three-year average by more than $6 million. Imagine how bad this situation would have been if it had included financing for the first phase of a $40 million “no vote jail.”

Without a retrenchment in county spending, revenue will need to increase by $5 million over the next several years, and in a sluggish economy an increase of this size can only come from the real estate revaluation in 2018. A 15-percent increase in the ad valorem tax would be able to raise property taxes high enough to collect $38 million. That $38 million, along with sales taxes totaling $8.5 million and $16.5 million in outside supplements, would total about $63 million. This would be enough to make up for recent deficits and accommodate average spending creeping up to $61 million for several years beyond 2018. However, it would also mean that the county’s 18,500 households would then be funding $46.5 million in county taxes. We would be paying $2,515 per household annually, and incurring tax increases at an annual rate of 4.5 percent, in an economy that is growing annually at only 1.5 percent, levied on real estate that is generally still worth less than it was assessed at during the revaluation in 2010.

Tax and spend policies this aggressive have harmful effects on local economies. High tax programs impede both business formation and expansion. Employees find themselves with lowered standards of living and feel compelled to seek higher wages. Employers find themselves paying escalating tax rates in a slow growth economy, while at the same time, facing demands for wage increases that are not supported by productivity gains. Businesses raise prices, sales volume slackens, dividends and capital spending are reduced, job formation falls, unemployment rises and population stagnates.

Sound familiar?

Beaufort County is the poster child for frivolous spending. For over a decade, the county board has implemented a series of helter-skelter initiatives that have steadily sapped the financial strength of the local economy by increasing taxes, sponsoring corporate welfare and accumulating a portfolio of disappointing public works, while employment dropped to 20-year lows.

One way or another, the cost of local taxes always lands on the backs of local families.

Warren Smith is a Beaufort County resident.