Commentary

Fred Lampe: Growth plan puts tax cart before the horse

March 25, 2014 

If you aren’t already worrying about Chapel Hill’s town finances, it’s time to start right now! We are facing a scary list of upcoming demands on the taxpayer. Chapel Hill residents’ property taxes taxes are high compared to the average North Carolina town and were increased this fiscal year. Our citizens support good public services and investments in the community that will benefit all of our diverse population, but they want prudent and well considered use of their tax dollars.

When residents raise concerns about congestion brought by planned dense developments in our “future focus areas,” some of our leaders blithely assure us that transit will take care of all our problems. But transit is not free. In fact, with the loss of federal and state financial help, the cost to taxpayers is going up steeply. We have a lot of very expensive buses that we will have to replace soon and we will need more buses to meet demand on popular routes. What will be the town’s cost for transit in a few years?

A huge black cloud of unfunded obligations for retired employee health costs is hanging over us. We are now sending our neighborhood garbage trucks all the way to Durham to dump their loads, a ridiculously inefficient practice that will require an expensive new transfer station to correct. Our police and fire buildings are at (or past) their replacement dates, forcing our key public protectors to work in bad conditions. The Council is still stymied by the decision on how to provide the promised equity to the Rogers Road community. That’s just a sample – the whole list is too long to include.

Dealing with such a list of challenges calls for a thoughtful, comprehensive examination of the town’s obligations and resources to make sure that we start taking careful steps to get our finances in balance. But that’s not what we are getting.

Town budget officials have prepared an impressive list of the big budget choices facing us, but have not helped the council get started on budget preparation by making specific projections of costs for transit, solid waste, and other big items for several years ahead and showing which costs can be packaged into reasonable annual budgets.

The town’s push to approve a radical rezoning of the 200 acre Ephesus-Fordham area brings more threats to the town’s budget. The theory is to increase the town’s tax base to help our financial balance, but the town has not provided any analysis that shows a significant increase in tax revenues over the added town cost to serve the new development.

It appears that the first redevelopment in this area will be 1000 or more new apartments, which usually cost the town more in service demands than they pay off in added tax revenues. And it’s not encouraging that the town is proposing to start by borrowing $10 million to pay for the roads and stormwater management required for this new development. The anticipated new tax revenues on this new development will be dedicated to paying off the town loan for 20 years or so, while the rest of us taxpayers are stuck with paying for all the town services to the new development. When will this new development start to carry its share of the load for general town services? And when you look closer, the cost estimates for the road and stormwater improvements are based on very sketchy estimates, so we will probably have much greater costs to repay.

This is not the time to take a blind risk that Ephesus-Fordham will pay off for the taxpayers. It’s time for the council to take a careful look ahead and make prudent plans for town finances. Is borrowing $10 million for Ephesus-Fordham a higher priority than a waste transfer station and new police and fire facilities?

Fred Lampe lives in Chapel Hill.

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