RALEIGH — Catawba County ranks No. 76 in the state in the amount of local taxes and fees residents pay, when that amount is expressed as a share of their income. Catawba dropped 46 spots from No. 30 in the latest edition of a new John Locke Foundation report.
Hickory‘s local tax-and-fee burden is unclear. Hickory was the only city of more than 25,000 residents left out of the new rankings for the 2012 budget year because of incomplete information. Hickory ranked No. 16 of 36 larger N.C. cities during the 2011 budget year.
Charlotte, Mooresville, Chapel Hill, Wilmington, and Monroe topped the rankings of combined city and county costs per person. At $2,336 per person, Mooresville’s local tax-and-fee burden dropped to No. 2 in the state one year after ending Charlotte’s 11-year run at No. 1. The Queen City returned to the top spot in the latest report.
The latest list compared 35 ranked municipalities with at least 25,000 residents. Jacksonville, Thomasville, Indian Trail, Fayetteville, and Asheboro ranked lowest among the larger cities.
Among 88 ranked medium-sized N.C. municipalities, Statesville ($1,798) ranked No. 15. Some communities in the region had local revenues per person calculated closer to the state median. They include Morganton ($1,731), Newton ($1,715), Conover ($1,686), Boone ($1,630), Shelby ($1,435), and Lenoir ($1,394). Three others ranked among the bottom 25 percent in local tax burden: Kings Mountain ($1,342), Forest City ($1,196), and Sawmills ($961).
Avery County (5.25 percent) ranked No. 7 among the state’s 100 counties in local taxes and fees expressed as a share of income. Watauga (4.91 percent) ranked No. 13, and Iredell (4.40 percent) ranked No. 27. All other area counties ranked below the state median: Caldwell (3.79 percent), Rutherford (3.71 percent), Alleghany (3.56 percent), Ashe (3.52 percent), Burke (3.50 percent), Cleveland (3.44 percent), Wilkes (3.39 percent), and Alexander (2.61 percent). Alexander came in at No. 94 out of 98 ranked counties in local tax burden.
By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2012 is the 16th such report published by the John Locke Foundation. Lowrey used the most recent data available from the State Treasurer, Bureau of Labor Statistics, and Bureau of Economic Analysis to construct rankings of local government cost on a per-person basis. For counties, he also constructed rankings on a share-of-income basis.
Lowrey highlights a continuing problem that helps skew the rankings. Hyde and Sampson counties and 44 municipalities missed state deadlines to file their State Treasurer’s Annual Financial Information Report.
“Whether those local governments filed the statements after the deadline or not, the information was not available from the treasurer’s office in time to be included in this report,” Lowrey explained. “Without those AFIR statements, By The Numbers cannot include local tax burdens for those communities. Complete reporting would result in a somewhat higher combined county-municipal median tax burden.”
Lowrey also repeated his annual warning against comparing the relatively high per-capita tax numbers in resort communities to those in other N.C. cities. Communities with larger numbers of second homes and resorts — combined with small year-round populations — will see larger per-capita tax burden figures, he said.
The latest report contains another warning. “The state treasurer’s office drastically reformulated how local government financial information is reported with data for the 2012 budget year,” Lowrey said. “It is thus possible that comparisons between this edition of By The Numbers and previous reports might be more difficult.”
Among the 10 most populous counties, Durham (5.66 percent), Mecklenburg (5.44 percent), Guilford (5.02 percent), New Hanover (4.84 percent), Forsyth (4.56 percent), Gaston (4.56 percent), Buncombe (4.52 percent), and Wake (4.44 percent) all ranked among the top 25 N.C. counties in average cost of local government. Union (4.04 percent) ranked near the middle of the pack. Cumberland (3.11 percent) ranked No. 83 of the 98 ranked counties.
North Carolina collected $21.9 billion in state tax and fee revenues from July 1, 2011, to June 30, 2012. That’s 6 percent of state residents’ personal income. Local governments collected an additional $15.7 billion in property, sales, and other taxes and fees. That’s another 4.3 percent of personal income.
“Combined, they represent a state and local tax and fee burden of 10.3 percent,” Lowrey said. “Federal collections raise the total tax burden on North Carolinians to approximately 26.8 percent of personal income, on average.”
Lowrey stresses that a high cost-of-government ranking in the By The Numbers report does not equal a judgment that a city or county is governed poorly.
“By The Numbers is a tool that represents factual data only, without editorial comment or bias,” Lowrey said. “The best way to compare your city or county to others is to find municipalities or counties of similar size and demographics.”
“This report helps taxpayers evaluate whether the services they receive from local government merit what they are paying for them,” he added. “We hope taxpayers will continue to ask about the proper role of local government and its relationship to the state. It’s important to keep these discussions alive and to ensure our local leaders remain accountable to taxpayers.”
The John Locke Foundation Policy Report, “By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2012,” is available at the JLF website. For more information, please contact Michael Lowrey at (704) 569-4269 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].