The 28 counties that have put tax increase votes on the November ballot are quick to declare that they are in dire fiscal straits and that they must have more money. Their allies on the ?government always needs more money? left have jumped to their defense by criticizing our recently published reports on those counties.
While each of these 28 counties faces different fiscal situations and challenges, one fact is common to all of them. Revenues generated from inside the county over the last five years have risen faster than population and inflation. It seems that our critics either don?t understand or don?t want to understand the significance of this fact.
Instead of being starved for funds, county revenues, even in the high growth counties, have kept pace with population and inflation. Another way of looking at this is to ask how many taxpayers in these counties can say that their wages have kept pace with inflation over the last five years? My guess is not many. This means that many county taxpayers have not only lost ground to inflation, but they have lost ground by paying for county government that takes more and more of their income.
Furthermore, this means that new residents are paying their fair share and that growth is paying for itself. Let me explain by looking at a hypothetical county that has 100 residents with per capita revenues of $500. Twenty new people move in to the county. If those 20 new people pay only $100 per person in taxes over a year, the new total per capita revenue will be $433 (assuming there is no inflation). Thus in every one of the 28 counties with tax increases on the ballot, the county is receiving, on average, more per capita revenues, adjusted for inflation, per year regardless of the increase in the population. Population growth has not diminished the per capita revenues in any of these counties.
Some critics have mentioned that school funding must increase not only because new school buildings are needed but also because schools are reducing class size in order to improve student achievement. This is partially true, reducing class sized costs money, but this spending does not improve student achievement. A 2006 John Locke report analyzing class size noted that, ?Reduced class sizes failed to significantly increase student performance on state reading assessments.? Thus school districts are claiming that they need more money for a program that does not contribute to improvements in student achievement. Sounds like a waste of money to me.
Regarding the high growth counties that need to build new school buildings, giving them a blank check is a bad idea. Union and Catawba counties are asking voters to approve tax increases. These counties have built new high schools recently at costs of $22,539 and $27,356 per student respectively. While there are variations in land costs among counties, some counties have been able to keep per student building costs below $20,000. But as a John Locke report concludes, the more important point is that spending on buildings is not related to student achievement. Newsweek magazine?s third ranked high school in the nation is in a building that cost about $9,000 per student. County commissions and school boards must pay more attention to what goes on inside school buildings.
Unfortunately, in the quest for higher taxes, many county commissioners are responding to special interests who benefit from more spending and not the general taxpayers who must pay the bills. In this current round of tax increases, county commissioners are defining leadership as ?educating? the public on the need for more money. They are also spending taxpayer money on ?education campaigns? to convince voters to vote for the tax increases.
True leadership is based on saving the taxpayers money by using innovative ways to deliver government services. Anyone who has had any experience with government knows that government can deliver better services at lower costs. All it takes is a few commissioners who are willing to break out of the spend and tax status quo and take some risks by adopting new approaches.
