ghoyle@heraldsun.com
May 8, 2008
CHAPEL HILL -- With any potential revenue from Tuesday's failed land transfer tax out of the picture, the Orange County Board of Commissioners must figure out where to go from here.
And the next step likely will include an increase in property taxes -- the main source of funding for Orange County.
About 70 percent of the county's total general revenue was funded by property taxes in the 2007-08 fiscal year. The land transfer tax referendum on the ballot was an attempt to diversify that revenue stream.
But in Tuesday's primary election, 28,053 county residents voted against the tax, while only 14,288 voted in favor -- a nearly two to one defeat, according to final but unofficial results.
"Without this alternative revenue source, anything we would fund would have to come out of property tax -- I think that goes without saying," said Orange County Manager Laura Blackmon Wednesday of the roughly $3.5 million the tax was expected to bring in, if approved.
Newly elected commissioner at-large Bernadette Pelissier said she wasn't surprised by Tuesday's results.
"I think the land transfer tax was put on too late in the whole process," she said. "I wish that the General Assembly had actually made it a tax more on new homes because there's a misperception that it's only for the seller to pay it, when it really can be in the closing costs and paid by the buyer."
The county will have to re-examine and consider all funding options available, Pelissier said.
"I'd really like the commissioners to look at increasing the impact fees, though that wouldn't solve all of the problems," she said, referring to a fee imposed on property developers for the new infrastructure that must be built or increased due to new property development.
Barry Jacobs, current chair of the commissioners, said that he hopes that the board will approve a local funding alternative option to appear on the November ballot.
"I'm appreciative to the people who tried to take up the ball for the notion that local government needs more funding options," Jacobs said. "And in this case we only got to arrange for this option, which had the deepest pockets available opposing it. The notion that local government should have local alternatives is still important and still needs to be pursued."
Meanwhile, county staff projects that an increase of 1 cent on the tax rate in the upcoming fiscal year would generate about $1.27 million. If all of the allotted county and schools' projects were fully funded, the county's budget increases for fiscal year 2008-09 would total $14.9 million, or the equivalent of an additional 11.68 cents on the ad valorem tax rate, according to county staff's preliminary budget drivers.
And in absence of additional local revenue, the county's dependence on property tax as its primary revenue will only increase in the future, according to county staff.
The 2007-08 budget called for an increase in the ad valorem property tax rate of 4.7 cents, bringing the rate to its current 95 cents per $100 valuation or $1,900 for a $200,000 house.
The commissioners will meet at 7:30 tonight at the Southern Human Services Center, 2501 Homestead Road, Chapel Hill, for a budget work session.
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Tuesday's primary election produced a record turnout in Orange County, with nearly 48 percent of the county's approximately 96,000 registered voters taking part, according to final but unofficial results.
For comparison, the May 2006 primary drew only 13.23 percent of registered voters locally, but that ballot did not include a presidential primary.
"I think it had a lot to do with the presidential contest and we had a lot of people voting in the land transfer tax contest," said Tracy Reams, director of the Orange County Board of Elections.
Registered Voters: 96,606
Ballots Cast: 46,190
Voter Turnout: 47.81%
© 2008 by The Durham Herald Company. All rights reserved.