Is a Land Transfer Tax necessary?

"The views expressed in this commentary are those of the writer and in no way represent the opinions of the Mountain Times or any of its affiliated publications."

Yes: Citizens benefit in the end

By Richard Blackburn
I am responding to a letter in a recent edition of a local newspaper that was less than favorable for the Land Transfer Tax. The gentleman who wrote the letter used some of the classical arguments that opponents have used in other counties. In order to refute these arguments we only need to look at the success reports from Dare, Currituck, Chowan, Pasquotank, Perquimans and Camden counties.

Since implementation, the Land Transfer Tax has allowed these counties to: 1) reduce property tax; 2) increase funding for economic development; 3) reduce reliance on borrowing to build schools; 4) reduce the funding disparities between these school districts and the remainder of the state; 5) keep home values affordable; and 6) to keep residential growth vibrant.

These counties were given the authority by the General Assembly in the mid 1980s, to implement the Land Transfer Tax. It was not until 2007 that all other counties were given the option to implement the tax and then only by voter referendum. The counties mentioned above were allowed a rate of 1%, whereas a top cap rate of 0.4% is authorized by the new state law. No more than 0.4% is allowed.

Commissioners are charged with the responsibility to provide quality infrastructure while keeping the property tax rate low.

Ashe County has done that. The current tax rate is 39.5 cents. Only nine out of 100 counties have a lower tax rate than Ashe. Incidentally, two of those nine have the Land Transfer Tax.

It is easy for those who clamor for cutting spending to do so without having been in the fray of budget making. When the real needs are seen and revenue is scarce, you have to make cuts. In the 2007-2008 budgets, cuts to the tune of three million dollars were made. The real question is do you really think Ashe County can remain an inviting place and compete in economic development if at most, basic infrastructure and services are not provided? I think not!

The proposed Land Transfer Tax is not an additional tax overall for Ashe County. It is a source of revenue in lieu of an ever-ballooning property tax increase. Therefore, the overall tax burden is not increased, it is spread around. A balanced approach to taxation clearly benefits elderly citizens and those on fixed income by lessening the pressure on property taxes. This allows these citizens to remain in their homes without fear of losing them to increasing tax rates or tax values.

Despite opposition from some, the counties who have implemented the Land Transfer Tax have not suffered adversely. The writer of the aforementioned letter suggests that the tax will cause real estate property to soar. Another argument made by the writer suggested that potential buyers will dodge Ashe County. Neither of these happened in those counties in eastern North Carolina where the tax has existed for 20 years.
The writer's attempted lesson on basic economics seems reversed to me. If a county gives attention to maintaining good basic infrastructure, it certainly is a fact that the county will be in a more competitive position to promote economic development. Subsequently, this attracts additional activity. If basic infrastructure is neglected, there is no attraction to the County.

It's not a question of taxing ourselves into prosperity; rather it is an effort to monitor overall tax policy and attempt to keep property taxes low. Furthermore, it is an effort to remain aware of and monitor the total tax picture.

Citizens of Ashe County, you have elected us to provide quality infrastructure, while keeping the property tax low. A vote in favor of the Land Transfer Tax on May 6 will help us do that. The wording displayed on signs posted around Ashe County by those opposed to the Land Transfer Tax is totally misrepresenting the facts. I urge each one to carefully analyze the situation. Higher and higher property taxes equate to a "HOME" tax. If you do not plan to buy or sell property you are not affected by the Land Transfer Tax. Therefore, that is not a "HOME" tax on all Ashe County homes. I urge all Ashe Countians to analyze for themselves whether certain higher property taxes on all real estate, or a Land Transfer Tax applied only when real estate sells is a "HOME" tax!

Richard Blackburn is the chairman of the Ashe County Board of Commisioners

No: A sales tax is more fair

By Dr. Richard K. Calhoun, M.D.
I hesitate to write, but I feel another opinion will keep the debate alive in regard to the land transfer tax. It has been an interesting and predictable process. At least the Ashe County Board of Commissioners is allowing us to choose our poison at the ballot box!

If we recall the debate, it was agreed by the majority that a new law enforcement center was needed. Multiple possibilities were discussed and the current plans were voted on by a majority of the commissioners at that time (not myself, however). I asked how would we pay for it and predicted that it would cost $21 million. While the cost hasn't reached that point, we should keep watching! This will not be a completed project, part of it will be a "shell" building for future expansion and there will be future costs!

It is purported the land transfer tax is needed for the cost of schools, library, law enforcement center, and other costs of county function. Ashe County has a proud tradition of taking care of its schools and providing the very best for its students. We have always found money for our schools in the budget process. I feel this need for tax revenue is almost solely due to the law enforcement complex. If we could go back before the county hostilely invaded the town limits of Jefferson and had grandiose ideals of the jail size, we might not be looking at this tax increase.

What is the fairest tax? Each of us will have our own opinion. I endorse Gov. Mike Huckabee's national sales tax concept for us as a nation. I think the sales tax is also a better option locally. Why should property owners continue to bear the brunt of county spending? A sales tax involves everyone who buys goods and services. It would include those who are not property owners, but utilize the services of law enforcement. There comes a time when our property owners on fixed incomes can no longer hold on to their land because of the tax burden.

Will we see lower taxes? After seeing first hand how county government operates, I would say no.
Remember, we function under majority rule. Only three out of the five county commissioners need to want a project and it is done. The county administration has to convince three on the board to get a positive vote and they do that well! It is easy to have grandiose plans when one's not responsible for the bill.

We as taxpayers will always bear the burden of the decisions of a few, our elected servants. The electorate can make a difference through the ballot box. I would pray we can avoid future "Eller" property debates and jail debates, but that would be too much to ask. There are more projects of county government coming. I only wonder what they will cost. I would encourage everyone to stay abreast of what is going on in county government, it is interesting!

Dr. Calhoun is a former Ashe County Commissioner