At the March 20 meeting of the Chapel Hill-Carrboro Board of Education, we adopted a resolution in support of the Orange County commissioners' decision to place a land-transfer tax referendum on the May 6 ballot. It is projected that the land-transfer tax would generate approximately $3.5 million annually in Orange County to meet critical county facility needs.

Why did the board take this action?

The Chapel Hill-Carrboro City Schools' Capital Improvement Plan for 2008-18 includes $200 million in unfunded capital projects that need to be completed over the next 10 years. Major unfunded projects in the CIP include two elementary schools (in addition to Morris Grove, which is under construction), an additional middle school and the completion of the cultural arts wing and additional classrooms at Carrboro High School.

At the same time that we are facing $200 million in unfunded capital needs, the county is constrained in how much it can borrow for projects of this nature. Orange County is at its self-imposed borrowing cap and, therefore, does not now have the capacity for the additional borrowing that would be necessary to fund these projects.

Such a difficult situation calls for a new and different approach to raising the funds needed for capital projects. The members of the Board of Education are Orange County taxpayers, too. We are sensitive to the fact that ad valorem property taxes have risen steadily in recent years, in some part to support school district growth and the increasing costs of staff salaries and benefits. Board members also are managers of household budgets. We, too, are feeling the pinch of inflation when we shop for the basics needed by our families.

Because we are sensitive to the financial struggles that many Orange County residents experience, we encourage the county commissioners to pursue innovative approaches that will reduce the reliance on ad valorem property taxes to fund schools and other county projects. The land-transfer tax will diversify the tax collection base in Orange County because it will not affect all residents or property owners in the same manner.

Land-transfer taxes, which are capped at 0.4 percent by the North Carolina General Assembly, are paid only by those citizens who are selling a piece of real estate. The tax is paid on the selling price, not the property's assessed value. The tax is levied on all types of real estate, including commercial properties. The cost of this tax likely could be calculated into a property owner's asking price or negotiated with the buyer. On a $200,000 transaction, the land-transfer tax would be $800. Land-transfer taxes are one-time expenditures by real estate sellers and are not levied on an annual basis as ad valorem taxes are. Gifts of real estate or inherited transfers are exempt from the land-transfer tax.

The county commissioners chose the land-transfer tax over the other option given to them by the General Assembly -- a 0.25 percent increase in the sales tax. Sales taxes, of course, are paid by all of us every time we make a purchase. They affect all of us, including students, retirees on fixed incomes and struggling young families. In a time of economic downturn, it seems that those with the least ability to pay more in taxes should be spared from this kind of tax increase if similar or greater revenues could be generated from a land-transfer tax. Clearly, the Board of Education agrees with the decision of the Board of County Commissioners to place a referendum on the land-transfer tax on the May 6 ballot.

Supporting the land-transfer tax is one way that Orange County voters can help the Chapel Hill-Carrboro City Schools meet its unfunded construction needs and do so in a way that provides a stable base for investment in these projects. A member of our legislative delegation recently shared that six other counties in North Carolina have already implemented a land-transfer tax. In those counties, property taxes have gone down -- and school funds have increased. If the land-transfer tax does not pass, these unfunded capital projects will inevitably come from future ad valorem tax increases as the borrowing cap begins to be lifted.

I urge all Orange County voters to join the Chapel Hill-Carrboro Board of Education in support of the land-transfer tax referendum so that we are poised to meet the growth that continues in our community and the renovation needs of our aging facilities.