Policy Reports
By The Numbers 2005: What Government Costs in North Carolina Cities and Counties

January 16, 2005

Counties and towns are a critical level of government in North Carolina, providing or administering many critical services while taking in billions of dollars of revenue. This is especially true as the state government has increasingly shifted more taxing authority to localities to make up for money kept by the state. While the importance of county and municipal government is great, obtaining comparative data is difficult. To help address this problem, By The Numbers 2005 provides information of how much local government costs in every city and county in North Carolina.

Methodology

Using the most recent data available on property taxes, sales taxes, and miscellaneous taxes and fees from the State Treasurer’s Annual Financial Information Report, we calculated county and municipal tax and fee burdens, 1) as a percentage of income (for counties) and 2) per capita (for counties and municipalities). We then constructed a set of rankings to more clearly view the cost of local government.

Although this analysis is by no means definitive, it moves citizens one step closer to grappling with this complicated issue.

Findings

North Carolina collected over $15.3 billion in state tax and fee revenues for fiscal year 2002–2003, the latest year for which complete data is available. This represented 6.5 percent of the personal income of the state’s citizens. In addition, local governments collected an additional $11 billion in property, sales, and other taxes and fees, representing another 4.7 percent of personal income. Combining the two yields an 11.2 percent state and local tax and fee burden. Federal collections raise the total tax burden on North Carolinians to approximately 28.5 percent of personal income, on average.

Fiscal Year 2002–2003, like the year before it, saw a substantial increase in the local tax burden in North Carolina. Local tax and fee collections per capita stood at $1,046.52 (4.34 percent of per-capita personal income in the median county), compared to $993.06 (4.14 percent of per-capita personal income) the year previous. Unlike previous years, a majority of the increase came from higher tax and fee collections outside of the traditional property and sales tax sources. Property tax collections were also up. Despite a higher tax rate in many areas beginning half way through the year, sales tax collections were flat.

In 2002–2003 the median total property tax burden by county in North Carolina was 2.16 percent of income, or $515 per person. The range was from $1,341 per person in Dare County to $249 per person in Swain County. County rates ranged from 4.64 percent of income in Dare County to 1.26 percent in Alexander County.

It is important to note that incomes vary among counties and within counties over time, and this can affect the rankings. Counties of similar size and tax collections can vary in their burden because of differences in per-capita incomes. Differences among counties can also reflect the rate and extent of annexation, which places more taxpayers onto municipal tax rolls.

Download PDF file: By The Numbers 2005 (380 k)
Download PDF file: By The Numbers 2005: Appendix A (252 k)
Download PDF file: By The Numbers 2005: Appendix B (84 k)
Download PDF file: By The Numbers 2005: Appendix C (36 k)

Material published here may be reprinted provided the
Locke Foundation receives prior notice and appropriate credit is given.