Press Release

Montgomery seeks sales-tax hike after $1 million property-tax increase

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RALEIGH — After raising the local property tax rate by 9 cents in the past two years — including a $1 million tax hike in the past year alone — Montgomery County commissioners are pushing for a $225,000 sales-tax hike. John Locke Foundation researchers question that proposal in a new Regional Brief.

Voters will decide Nov. 2 whether county commissioners can raise the local sales-tax rate by 0.25 cents. As they cast their ballots, JLF experts urge them to consider Montgomery’s recent history of property tax hikes, commissioners’ poor track record of managing current county dollars, and the lack of accessible information about county finances.

“After raising property taxes by $900,000 last year and another $1 million this year, Montgomery County commissioners want local residents to dip into their wallets again to support a $225,000 sales-tax hike,” said Dr. Michael Sanera, JLF Director of Research and Local Government Studies. “That would be equivalent to adding another cent to the 9-cent property tax increase Montgomery taxpayers have faced in the past two years.”

“A property-tax rate increase from 58 cents to 67 cents per $100 of valuation represents a 15.5 percent increase in the tax burden,” Sanera added.

Sanera analyzes Montgomery’s sales-tax proposal with the help of report co-authors Joseph Coletti, JLF Director of Health and Fiscal Policy Studies, and Dr. Terry Stoops, Director of Education Studies.

County commissioners have yet to put forward much of a case to justify another tax hike, Sanera said. “What pressing need is leading to a request for another $225,000 from taxpayers?” he asked. “The commissioners’ official resolution calling for the vote states that the tax increase ‘is necessary to help address and alleviate fiscal constraints within Montgomery County.’ Apparently, commissioners want a blank check to spend the money any way they want.”

This sales-tax hike would fit with Montgomery County commissioners’ larger plans, Sanera said. “Commissioners have set a fiscal policy goal of increasing the number of ways they can tax citizens,” he said. “The sad truth is that giving government officials more ways to tax you leads to higher taxes overall.”

Voters have good reasons to question whether Montgomery commissioners can be trusted with additional money, Sanera said. “Facing substantial budget crises in recent years, county commissioners have responded by raising taxes and spending cash reserves,” he said. “Cutting spending would have been more prudent because the budget problems have persisted from year to year.”

“Again commissioners are trying to tax their way out of their budget problems,” Sanera added. “The new request for a $225,000 tax increase would bring total tax increases over the last three years to about $2.1 million. Montgomery County voters need to decide whether this record is fiscally responsible and in the best interest of county residents.”

It’s hard for Montgomery County taxpayers to keep track of county government, Sanera said. “One reason many Montgomery County citizens are largely unaware that the county government is in such dire financial straits is that the county does not provide easily accessible information online,” he said. “Montgomery County earned a D grade from the NCTransparency.com website. The county does not post online its checkbook, contracts, future liability for retirees, Capital Improvement Plan, number of employees, audit reports, employee salaries by job code, or other important information.”

“Nowhere on the county’s website do government officials even mention the Nov. 2 sales-tax vote,” Sanera added.

Since the General Assembly decided in 2007 to give each North Carolina county the chance to seek voter approval for higher sales or land-transfer taxes, voters have rejected higher taxes 68 times in 85 tries.

“Citizens at all levels — federal, state, and local — are frustrated with excessive and wasteful government spending,” Sanera said. “They believe they are not getting value for their tax dollars. County spending is no different. Montgomery County voters have a chance to send commissioners a clear message Nov. 2.”

Michael Sanera, Terry Stoops, and Joseph Coletti’s Regional Brief, “A Million Wasn’t Enough? Montgomery County commissioners want even more tax money,” is available at the JLF Web site. For more information, please contact Sanera 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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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.

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