Taxes do not rate a mention in this story on the John Locke Foundation’s new critique of CMS spending plans. And here taxpayers only rate a passing glance. What is going on?
Just a reflection of a widespread reluctance to admit that issuing public debt today usually means higher taxes tomorrow. Why this persists I have no idea.
After all, we just saw this past year the Mecklenburg County Commission raise property tax rates to grab an additional $71 million from taxpayers. And all the while county officials squawked about not having any real choice in the matter given the levels of mandated spending on things like debt payments. (Of course, that was not quite true — lower priority spending items could have been cut from the budget to avoid a tax hike, but we digress.)
But the vital point is that a 10-year, $2 billion school construction and renovation plan for CMS will come with $200 million more in annual financing costs. Being absurdly optimistic about revenue trends — including lotto money, increased property tax valuations, etc. — that added cost would require the county to come up with at least $100 million a year more in new revenue to pay for the bonds issued for that plan. In fact, Mecklenburg could very easily find itself with a $150 million or $200 million budget shortfall in the not too distant future. How to come up with an extra $100 to $200 million? Tax hikes. Big ones.
And here’s something else to ponder: At some point higher property taxes begin to negatively impact the value of residential real estate. Exactly where that happens varies from jurisdiction to jurisdiction and is closely tied to the perceived value taxpayers get from local government.
Mecklenburg County is not immune from taxpayers one day “flipping the bit” on local government, thus sending property values down. Keep this in mind as evidently no one in local government does.
