Western Rockingham Chamber against tax hike

The Western Rockingham Chamber of Commerce, which represents the Madison, Mayodan and Stoneville areas, has come out against the 3.7 percent sales tax increase.

This area of the county is most directly in competition with Virginia merchants, where the current sales tax is some 40 percent below the North Carolina rate.

Here is an excerpt:

“Many concerned citizens question why our county budget has grown at a rate much higher than inflation, and why past increases have not been more than sufficient to cover this new education initiative without adding back the suspended sales tax rate.”

Where does common sense lie?

Author’s note: This piece was published today in the Reidsville Review.

“Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins.”

So begins one of the greatest works in American political history, Thomas Paine’s “Common Sense”. A division between government and society has served as a cornerstone of American prosperity since its inception.

But if one looks around Rockingham County today, increasingly, government and society have become one.

Can you name the largest employer in Rockingham County? How about the second largest? If I told you they both began with the words “Rockingham County” and are tax payer funded would you be surprised?

I have been cautioned by some to keep this argument simple. But it is not a simple matter.

Taxes and spending are confusing to many, and often common sense is thrown out the window when politicians and special interests are intent on getting their way.

In the debate over increasing the sales tax in Rockingham County by more than 3 percent, proponents of the tax increase have laid it all on the table. We have been told: the elderly won’t have to pay it because food and prescriptions are exempted, it’s for the children, and my personal favorite, that the higher tax will mostly impact “people who can afford to buy expensive things.”

But where does common sense really lie?

We all want the best for the children. Great school buildings are important, and great education is even more important (they too are not the same). People on both sides of the sales tax issue support quality education, and also want nice buildings. But the fact is that our county leaders have options to finance the school’s construction needs. They just fail to exercise those options, and continue to resort to raising taxes rather than prioritizing government spending.

Numbers Don’t Lie

The sales tax referendum represents a 3.7 percent tax increase over the current rate. The new 7 percent sales tax will be 40 percent higher than Virginia’s 5 percent tax.

The local option to increase sales tax becomes available as counties also see an increase in their available revenue from the state due to the “Medicaid swap”, as it is being called. County Finance Officer Mike Apple has calculated the net increase to Rockingham County at approximately $1.4 million annually over the next five years.

The county budget is currently $91 million, of which a significant portion is clearly discretionary spending. Management has identified areas where our county spends more discretionary money than some wealthier or larger counties do. Are there really “no choices other than to raise taxes”?

Rockingham County already loses 35 percent of its sales tax revenue because of limited local economic activity. In other words, people are shopping elsewhere. Higher taxes will not help that problem. If our economic activity met just the state average for a county our size we would see an additional $5 million in revenue to the county each year.

Property taxes will continue to rise regardless whether this new sales tax passes. Current projections from county staff show the property tax rate rising steadily in the next five years, in addition to next year’s revaluation, which is projected also to be a significant effective tax increase.

County staff projects the current $91 million budget to grow by more than 13 percent over the next five years to $103 million.

Because governments will spend as much money as is made available to them, in the long run the sales tax will only increase total county spending, not create a lower property tax rate in Rockingham County.

I have these documents and would be more than happy to share them with anyone on request.

A Renewal of Common Sense

Again, we all want great schools and the best for the future. There are those who believe limited government allows individuals to keep more of their money, and spending it with local businesses would also help our local economy. Higher sales taxes will make it even more difficult to attract good retail businesses to our county. People will continue to choose to shop elsewhere. Higher taxes are one more factor in businesses (taxpayers) locating elsewhere too.

As Thomas Paine did so eloquently many years ago, I call on your “Common Sense” in voting NO to higher sales taxes on May 6. As citizens of this county, we should demand effective leadership, not higher taxes, from our elected officials.

Jeffrey Sykes

Citizens for a Better Economy in Rockingham County

The truth about Rockingham County sales tax

Dear Rockingham County voter:

During the remaining days of this primary season, The John Locke Foundation has helped educate us with this great report on the local sales tax issue. If we work hard to spread this common sense message, perhaps we can begin to turn the tide of tax and spend in this county.

To view the report, click this link:

http://johnlocke.org/acrobat/policyReports/rockinghamco-rb55.pdf

The reports shows irrefutably that this county has enough money available to it to build Phase III schools. The question is will we as voters hold our elected officials accountable to spend our money more efficiently, or will we continue to give them a pass on fiscal responsibility?

Please forward to those who may be interested.

Excerpts:

The North Carolina Department of Public Instruction (DPI) projects that over the next ten years, the number of students in Rockingham County schools will decline by 1,922, or more than 13.5 percent.

If the school district has facility needs, the county commission and school board need to show taxpayers how they would spend the almost $27 million in state money provided for capital improvements over the
next ten years.

Rockingham County benefited from the Medicaid swap more than many North Carolina counties. While 23 counties are receiving only the state’s promised “hold harmless” amount of $500,000 a year for
ten years, Rockingham County receives a little over $1.9 million the first full year and a total of $16.4 million over ten years.

From FY 2004 to FY 2006, Rockingham County gave over $4.2 million in incentives to a few selected private businesses. This practice is unfair to the hundreds of businesses in the county who are, at times,
forced to compete with tax-subsidized businesses.

An open letter to local developers and realtors

As realtors, developers and appraisers, you all have an incredible impact on the quality our homes and the nature of our county’s political discussion.

As a group, you all represent some of the most forward thinking self-starters in this area. You have created your own businesses and are directly responsible for the quality of your business activity.

That is why I pray that you will indulge me for five minutes to consider why you should at least stop and think about voting no to the local sales tax increase.

We all want the best for our children, and our nieces and nephews too. Great schools are important, even critical to the well being of a community. But the fact is that our county leaders have significant options to finance the school’s construction needs. They just fail to exercise those options, instead defaulting to the easy button by raising taxes.

The sales tax referendum represents a 3.7 percent tax increase. The local option to increase sales tax is only available because the state is taking the burden away from county government for Medicaid funding, thus also reducing some payments from the state to the county. However, counties will see a net increase in their available revenue from the state due to the “Medicaid swap” as it is being called. Mike Apple has calculated the net increase to Rockingham County at approximately $900k-1.2 million annual over the next few years.

So the fact remains that the county does have options other than increasing taxes to meet local needs.

The county has more than $22 million in discretionary spending in its current budget. More than $15 million already goes to the school system. Setting aside the school funds, leaves $7 million of available money for the county to chose how to spend.

Are there really “no choices other than to raise taxes”?

Lastly, Rockingham County already loses 35 percent of its sales tax revenue because of limited local economic activity. If our economic activity met just the state minimum average for a county our size we would see an additional $5 million in revenue to the county.

Again, we all want great schools and the best for the future. There are those who believe limited government allows individuals to keep more of their money and spend it with private local businesses.

I ask that you consider these perspectives and others available at our website, stopthehike.wordpress.com

As leaders in the community, I would challenge you not to abdicate the responsibility you have to demand effective government from elected officials.

Thanks for your time.

Jeff

p.s. Current projections from county staff also show the property tax rate floating to the mid 70 cent range, with a revaluation, in the next 5 years. I have these documents and would be more than happy to share them with any of you on request.

Sympathy shouldn’t trump sound policy

Analysts with the John Locke Foundation have recently begun releasing a series of policy reports examining various sales tax requests that will be voted on across the state on May 6.

While they have yet to prepare a report on Rockingham County, much insight can be gained by examining the fiscal situation of different counties across the state.

“By far, counties spend more money on public education than on any other area. Total local government spending in North Carolina on public education was $2.68 billion — or $1,934 per pupil — for the 2006-07 school year. Nearly 25 percent of all expenditures on public schools come from local tax revenue.
Given the amount of taxpayer money involved, sympathetic appeals for school funding should not come at the expense of sound fiscal policy.
County governments and school boards should hold expenditures of local tax dollars for education and additions to public school personnel in proportion to changes in their school populations.”

Can anybody tell us the difference between school population in Rockingham County in 1998 and 2008? How about the difference in the school’s annual budget?

Two arguments against higher sales tax in RockCo

Apparently this mindset is working its way around Rockingham County, as reported by a young woman regarding one of the current candidates for county commissioner:

“(he said he) is for the raise in taxes because it is sales or estate taxes that will be raised, and “at least the influx of Hispanics will have to pay sales tax, after all they have to eat and shop too”  He intimated that, ‘Those who have lived here and established and owned property will be hit fairly and not disproportionately’.  “

So we kicked around some good ways to counter such an argument and this is what we came up with:

Our first argument:

People are making the wrong premises and asking the wrong questions.  The premise is that there needs to be more money raised through more taxes.  Reducing spending and limiting government is not an option that many people seem to be able, or willing, to consider.  If there is a problem, more government is the avenue to solve it, they think.  So the question becomes, what method is best to raise taxes?  Once they are at that point, then the higher sales tax is deemed better than higher property tax.  Ultimately, they get both… but they can always argue the property tax could be even higher.
 
Virtually all Democrats, and an increasing number of Republicans, have forgotten the principles of limited government. 
 
A government dominated society that has tried to cure its problems through more government has never been able to tax and spend itself into prosperity and liberty. But, we keep trying.

Our second argument:

The point is that no tax increase is needed at all and anyone that makes excuses for why to tax is missing that point. We must do two things, 1)promote buying in Rockingham County to increase our sales tax revenue without raising taxes and 2) cut the county budget because it has room for cutting. By promoting any kind of a new tax (the candidate) is buying into the idea that there are no other ways to develop revenue and save money.  If we keep raising sales taxes more businesses will chose to not locate in this county.

Vote NO to Local Sales and Use Tax on May 6.

Remember, it’s your money. Are you really under taxed?

Relying on sales tax is a poor policy decision

According to NC Budget and Tax Center Director Elaine Mejia, sales tax is the least fairest tax because it hits those with lower incomes harder than those with more income.

*But despite its unpleasantness, swapping property taxes for sales taxes is not all that it is cracked up to be.

First and foremost, the sales tax is the least fair of all major state and local tax sources. While it may be paid in dribs and drabs, those dribs and drabs add up, especially for low-income taxpayers. In fact, relative to income, the sales tax hits the lowest-income taxpayers six times harder than the state’s wealthiest taxpayers. Property taxes are also regressive, but not as much so, asking three times more of the lowest-income taxpayers relative to income compared with the wealthiest taxpayers.

The sales tax is also an increasingly inefficient way to pay for public services in North Carolina. This is because state policymakers have failed to broaden the tax base to include more services. As a result, the percentage of transactions in the state that are taxed falls every year and revenue from the sales tax doesn’t grow with the economy, much less keep up with school construction costs.*

Related, is a set of graphics that show that NC tax revenue has remained relatively flat as a percentage of the overall economy while rates have steadily increased. Their data suggests this is suggestive of an eroding tax base.

Rockingham County already missing one-third of its sales tax

According to data provided by Rockingham County:

The state average for sales tax revenue by a county with population of 50-100,000 is $17.4 million, or $201 per capita.

The average for Rockingham County is $12.1 million, or $132 per capita.

That is a 35 percent shortfall.

Are higher taxe rates the answer?

Higher sales taxes rates=even more people buying outside of Rockingham

Vote NO May 6

Commissioners have 22 million choices other than a tax increase

There exists $22 million in optional funding in the RockCo budget.

Real leaders would find a way to cut spending instead of hitting the easy button and raising taxes.

The county’s budget analyst, Adam Lindsay, has spent several years now analyzing county spending and laid out the details in plain English.

You may view the list of $22 million dollars in optional funding here.