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?

Four reasons to oppose the sales tax increase on May 6

The proponents of the tax have already started pushing that the extra quarter-cent sales tax is only 25 cents for every $100 spent.

They usually use a similar ploy regarding marginal property tax increases, and it’s effective.

But what about the effect of the sales tax increase on businesses and the county as a whole?

Proponents say it will raise $1.8 million a year

That is $1.8 million taken every year out of local citizen’s pockets and into government’s. That is $18 million over a ten-year period.

We want people to spend their money in our county

Local businesses, particularly that sell higher priced items, already complain of a real disadvantage because sales tax is so much lower in Virginia.  We need to be recruiting more retailers into our county so people will spend their money here.  Higher sales taxes are a disincentive for those retail businesses.

The overall tax burden in our county is already very high

Neighboring Virginia has lower personal income tax, corporate tax, sales tax, gas tax, and in general, property tax.  Neighboring North Carolina counties have lower property tax.  Our state has the highest tax burden in the Southeast region from Texas to Virginia.  People want local government to recruit businesses to come here and bring jobs.  Like it or not, businesses and jobs, whenever possible, will locate in areas where their overhead costs, including taxes, are lesser rather than greater.  This is devastating to the county’s tax base and ability to pay for services.

The proponents already have a list of capital improvements and services that exceed $80 million

Keep in mind the tax will only raise $1.8 million a year.  And, that is gross.  Consider the effect of sales tax revenues we are already losing every year, because people choose to do their buying outside the county.  A higher sales tax will only make this problem potentially worse.

VOTE NO ON “COUNTY SALES AND USE TAX” ON THE BACK OF THE BALLOT MAY 6

What we are up against

Source: WFMY News 2

Eden, NC - Rockingham County voters will see an extra question on their May primary ballot. Leaders will ask tax payers to approve a quarter-cent sales tax increase.

Commissioners say they need the money to get the county out of a million dollar debt and pay for school repairs.

Early estimates show the sales tax could bring in more than $1.5 to the county. A big chunk of that will help the school system repair some its oldest buildings, like Douglass Elementary.

The Eden school is 70 years old and the building shows its age.

“We’ve had on going problems over the past year or so,” said the school’s principal, Gary Pyrtle.

Students study in rooms with ceilings that drip water. Masking tape holds together a number of old pipes and hot furnaces are uncovered.

County leaders say Douglass along with Stoneville Elementary and Reidsville High School need to be fixed. But the only way to do it is to raise the sales tax.

The county wants to up the sales tax a quarter-percent over the current rate of 6.75%.

“The easiest way to put it, if you spend a hundred dollars it’s costing you an additional quarter,” said county superintendent, Dr. Rodney Shotwell. “That’s a small price to improve our schools.”

But not everyone is on board. Eden resident Jean Harrington said she would vote against the sales-tax increase.

“There’s a lot of foreclosures on properties and I think people are really hard pressed,” said Harrington. “I would really hate to ask a lot of people who are on a limited income to have to cough up more for sales tax.” County leaders say the additional revenue will also help pay for a new animal shelter and a library in Western Rockingham County.

If approved, the sales tax could bring in $1,673,750 to the county. But leaders cannot impose the tax until October 1st.

Guilford and Randolph counties will ask their voters to approve the same sales tax increase in May. If approved the tax could generate more than $15.6 million dollars in Guilford County and just under $2.5 million in Randolph County.

Open thread: For or against

If you are opposed to the quarter-cent sales tax increase in RockCo that will be on the May 6 ballot tell us why. If you are for it, do the same.