Rocky Mount’s Tax Burden Among the State’s Lowest

January 28, 2007

Click here to view and here to listen to Chad Adams discussing the By The Numbers report.

RALEIGH – Local taxes and fees in Rocky Mount totaled about $1,342 per resident in 2005, ranking the city 24th out of 29 major N.C. cities in local government costs, according to a new report from the Center for Local Innovation. Wilson, at $1,411 per person, ranked 22nd.

Charlotte, Wilmington, Asheville, Durham, and Chapel Hill constituted the five municipalities with the highest combined city and county costs per person. That’s among the 29 municipalities with at least 25,000 residents. Jacksonville, Thomasville, Kannapolis, Goldsboro, and Burlington ranked lowest in tax and fee burden among the larger cities. Goldsboro ($1,228) ranked 26th.

Among 91 medium-sized municipalities, Tarboro ($1,477) had local revenues per person calculated near the state median. Roanoke Rapids ($1,174) ranked among the bottom quarter of that group.

Three area counties ranked among the state’s top 20 for heaviest tax burdens, when that burden was expressed as local taxes and fees as a share of income. They were Warren (5.70 percent), Edgecombe (5.67 percent), and Wilson (5.50 percent). Most other area counties had tax burdens closer to the state median of 4.55 percent: Pitt (5.30 percent), Halifax (4.90 percent), Johnston (4.66 percent), Northampton (4.44 percent), Nash (4.19 percent), Wayne (4.09 percent), and Franklin (4.04 percent). Greene County (3.48 percent) ranked 91st among the 100 counties in local tax burden as a share of income.

By The Numbers 2007: What Government Costs in North Carolina Cities and Counties is the ninth such report published by CLI, a division of the John Locke Foundation. Policy analyst Michael Lowrey authored the study. He used the most recent data available from the State Treasurer, the Census Bureau, and the 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.

2005 looked like 2004 in terms of an increase in the local tax burden in North Carolina, the CLI report stated. “Local tax and fee collections per capita stood at $1,134 in the median county, compared to an inflation-adjusted $1,120 the previous year,” Lowrey said.

While county and municipal revenues outpaced inflation and property growth, income grew at an even faster rate, Lowrey said. That means the local tax and fee burden fell slightly for the average North Carolina taxpayer, from 4.66 percent to 4.55 percent of per-capita personal income. The rate stood at 4.32 percent in 2003.

Among the 10 most populous counties, New Hanover (6.42 percent), Durham (6.17 percent), Mecklenburg (5.52 percent), and Guilford (5.44 percent) ranked relatively high in average cost of local government. Buncombe (5.16 percent), Gaston (4.88 percent), Wake (4.77 percent), Forsyth (4.74 percent), Union (4.48 percent), and Cumberland (4.31 percent) ranked near the middle of the pack.

North Carolina collected more than $17.8 billion in state tax and fee revenues from July 1, 2004, to June 30, 2005. That’s 7 percent of the personal income of state residents. Local governments collected an additional $12.4 billion in property, sales, and other taxes and fees. That’s another 4.8 percent of personal income.

“Combined, they represent a state and local tax and fee burden of 11.8 percent,” Lowrey said. “Federal collections raise the total tax burden on North Carolinians to approximately 31.2 percent of personal income, on average.”

Property taxes alone consumed 2.26 percent of personal income in 2005, or about $563 per person. The range was $1,425 per person in Dare County to $271 per person in Swain County.

“The cost of local government is rising and seems to be doing so at a rate faster than either population or inflation,” said CLI Director Chad Adams. “The ultimate reality is that North Carolinians fund that growth from their personal incomes.”

Lowrey and Adams noted that a high cost-of-government ranking in By The Numbers 2007 does not necessarily mean that a city or county is poorly governed.

“By The Numbers is a tool that represents factual data only, without editorial comment or bias,” Adams said. “The report does not attach the label of ‘good’ or ‘bad’ to a particular ranking. Taxpayers can use the rankings and the numbers to evaluate whether or not the services they receive from local government merit what they are paying for them.”

The Innovation Guide, “By The Numbers 2007: What Government Costs in North Carolina Cities and Counties,” is available at the JLF web site. For more information, please contact Chad Adams at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].