Published: Mar 04, 2012 02:00 AM
Modified: Mar 03, 2012 04:26 PM
Chapel Hill, Carrboro and Orange County have not raised property taxes for three years.
A skeptic would suspect that taxes must have been too high four years ago. An optimist would praise a period of government restraint. Everyone should be worried about how long it will last.
Across the country, many counties, cities and towns have had to cut programs and personnel to avoid resorting to tax increases on families still mired in recession-like conditions.
For the most part, our elected officials have been able to minimize programming cuts and avoid any layoffs. Managers have adroitly postponed maintenance projects, dipped into reserves, and even diverted bond money from long-term capital projects to short-term operational needs.
But of course the longer we put off maintaining public facilities - e.g. road repaving building and park upkeep - the more expensive it is to catch up later. Savings cannot be tapped much further without jeopardizing bond ratings, and will need to be replenished.
To make matters worse, some new and increased costs are unavoidable. Health care, for current and retired public employees, continues to escalate unabated. The planned landfill closing, just a year away, will significantly increase trash-hauling costs for everyone. Chapel Hill needs to digest the swollen debt and operating costs it engorged in the recent library expansion.
Without raising more money - meaning taxes - there is a day of reckoning coming. Since staffing shell games have been played out, further personnel cost cuts will actually require cutting personnel. In other words, our local governments will have to make the kind of adjustments to a new economic reality that many other communities and businesses began several years ago.
Or, they could increase taxes.
There are several reasons why the short era of tax restraint may end this year. First, there's the political cover provided by three years without increases. Expect to hear "we've done our best for as long as we can."
Second, the quadrennial revaluation is looming next year. For perhaps the first time ever, Orange County property values will drop. That means tax rates will have to increase considerably just to maintain revenues.
The third reason applies mainly to the towns, but complicates the county's decision. This November's elections are for county seats only. Chapel Hill and Carrboro officials do not have to face their electorate, leaving them much freer politically to act. Four of the Orange County commissioner seats are on the ballot. That, and a potential transit tax referendum, may act as a governor on the county property tax decision this year.
The long-term solution is to grow the tax base, which Carrboro, by approving Shelton Station, and Orange County, by bringing utilities to its economic development zones, are taking concrete steps to accomplish. In contrast, by denying Aydan Court and Charterwood, Chapel Hill has taken two steps backward, making its "Open for Business" advertising campaign ring hollow.
It used to be the local tax burden only impacted our poor. This lingering downturn has left even the middle class vulnerable to the high cost of living here.