Press Release

Durham bonds would boost state’s 5th-highest tax burden

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Click here to view and here to listen to Terry Stoops discussing this Regional Brief.

RALEIGH – Durham County is asking voters next week to approve $194 million in school construction bonds and increase an already high tax burden on low- and middle-income homeowners. That’s the key finding in a new John Locke Foundation Regional Brief.

“A successful vote would force taxpayers to shoulder the tax increases associated with the bond,” said report author Terry Stoops, JLF Education Policy Analyst. “That would intensify a tax burden that is quickly becoming unbearable for many people living in Durham County.”

Durham has failed to adopt changes that could help the county avoid additional taxes and long-term debt, Stoops said. “The local government has failed to implement the full range of school facilities alternatives and strategies that could accommodate enrollment growth without digging deeper into taxpayers’ pockets.”

Durham and any growing school system should adopt a long-term capital plan that focuses on priorities, Stoops said. “The county should redirect funds away from low-priority county initiatives and school programs to pay for critical construction and renovation projects,” he said. “The capital plan should fund only those projects that directly increase capacity in high-growth areas.

“The plan also should employ strategies that reduce construction and renovation costs,” Stoops added. “Savings from reducing the size of county and school bureaucracies should pay for school facilities. Durham should use existing revenue streams, rather than debt, to pay for capital expenditures. And the county should exhaust all possible school facilities alternatives.”

Durham County taxpayers already face one of the state’s highest tax burdens, Stoops said. “Durham has North Carolina’s 19th highest property tax rate, and the 14th highest effective tax rate after adjusting for counties’ different revaluation cycles,” he said. “Factor in county population and average income, and Durham has the state’s fifth-highest tax burden.”

Local governments call on their taxpayers to cover nearly 80 percent of the cost of school building expenses in North Carolina, Stoops said. “Voters across North Carolina have approved 74 school bond packages worth nearly $7.3 billion since 1995, but they’ve also rejected 20 bond proposals totaling nearly $2 billion.”

The state also provides four sources of school facilities funding, he said. Durham is projected to get $12.4 million for school facilities in 2007-2008 through the corporate income tax, state lottery, and local-option sales taxes.

Options such as charter schools, early college high school programs, ninth-grade centers, virtual schools, satellite campuses, public-private partnerships, and adaptive reuse could help Durham save taxpayers from unnecessary expenses linked to enrollment growth, Stoops said. “These proven, cost-efficient solutions enhance educational opportunities for students and lighten the burden for county taxpayers.”

Durham County should rethink its strategy for addressing local school building needs, Stoops said. “The county must pursue a comprehensive school facilities strategy that is friendly to taxpayers and school officials alike.”

Terry Stoops’ Regional Brief, “Bond, School Bonds: School Bonds will leave taxpayers shaken down, not stirred,” is available at the JLF web site. For more information, please contact Stoops at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].

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About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.