April 21, 2013

Click here to view and here to listen to Michael Lowrey discussing this report.

RALEIGH — Local taxes and fees in New Bern totaled about $1,590 per person in the 2011 budget year, and the city maintained its No. 24 spot on a list ranking North Carolina’s largest cities based on their per-person local government costs, according to a new John Locke Foundation report.

Meanwhile, Kinston ($1,592 per person) moved up from No. 39 to No. 38 in a ranking of the state’s medium-sized municipalities.

The report ranked Kinston and a total of 92 N.C. municipalities with populations between 5,000 and 24,999 people. Morehead City ($2,163) ranked No. 7 on that list, while Washington ($1,926) ranked No. 12. Havelock ($1,177) ranked No. 76.

Among the largest cities, Mooresville ended Charlotte’s 11-year run at the top of the list of local tax-and-fee burdens. Chapel Hill ranked No. 2 as the Queen City dropped to No. 3. Wilmington and Durham rounded out the top five largest cities in combined city and county costs per person. Jacksonville, Indian Trail, Thomasville, Asheboro, and Goldsboro (No. 30 at $1,347) ranked lowest among the larger cities. Greenville ($1,859) ranked No. 12.

Carteret County had the area’s highest tax burden when that burden was expressed in terms of local taxes and fees as a share of income. Carteret (4.67 percent) placed No. 25 among 96 ranked counties. Beaufort (4.25 percent) ranked No. 42. All other area counties rank below the state median of 4.15 percent: Lenoir (4.10 percent), Craven (3.98 percent), Wayne (3.87 percent), Duplin (3.57 percent), Pamlico (3.25 percent), and Jones (2.64 percent). Jones County ranked No. 94.

By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2011 is the 15th 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 continues to highlight a continuing problem that helps skew data. Four counties and nearly 40 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 still is not available from the treasurer’s office,” Lowrey explained. “Without those reports, 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.

Among the 10 most populous counties, Durham (5.86 percent), Mecklenburg (5.31 percent), Guilford (5.19 percent), New Hanover (5.12 percent), and Buncombe (4.75 percent) ranked among the top 25 N.C. counties in average cost of local government. Wake (4.60 percent), Gaston (4.56 percent), Forsyth (4.56 percent), and Union (4.22 percent) ranked near the middle of the pack. Cumberland (3.22 percent) ranked No. 85 of the 96 ranked counties.

North Carolina collected $21.9 billion in state tax and fee revenues from July 1, 2010, to June 30, 2011. That’s 6.3 percent of state residents’ personal income. Local governments collected an additional $15.2 billion in property, sales, and other taxes and fees. That’s another 4.4 percent of personal income.

“Combined, they represent a state and local tax and fee burden of 10.7 percent,” Lowrey said. “Federal collections raise the total tax burden on North Carolinians to approximately 27.3 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 2011,” 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].