September 25, 2005
RALEIGH – Local government expenditures grew faster in Wilmington than in any other major North Carolina city over the past 10 years, according to a new report from the John Locke Foundation.
From the 1994 fiscal year to the 2004 fiscal year, city and county expenditures per person in Wilmington grew by 42 percent in inflation-adjusted terms, putting the coastal community tops in spending growth among the 10 largest cities studied by the Raleigh-based think tank.
By comparison, local-government spending grew by 32 percent in Raleigh, 28 percent in Charlotte, 22 percent in Greensboro, and only 5 percent in Asheville. Spending actually fell by 23 percent in Fayetteville during this 10-year period.
“Wilmington’s rapid rise in cost of government wasn’t caused by population growth, since we are adjusting for that,” said Joe Coletti, JLF’s fiscal policy analyst and the author of the Citizen’s Guide to Local Spending. “Many North Carolina communities swelled in population, but none saw city and county government costs grow as much as Wilmington’s did.”
While its rate of growth was highest, Wilmington’s total city and county spending per person in 2004 ($2,863) ranked 6th. Charlotte’s local governments spent the most ($3,804) and Asheville the least ($2,516) among major urban centers.
At about 93,000, Wilmington’s population ranked 8th out of the 10 cities studied. Coletti found that neither population nor annexation policy explained much of the variation in local-government spending. While Charlotte was tops in residents and government spending, for example, North Carolina’s second-most-populous city, Raleigh, ranked 9th in spending.
“We also found that while capital spending – on school construction, prison space, and other infrastructure – did shoot up in Wilmington over the past 10 years, it doesn’t do much to explain the growth of government,” Coletti said. “In operating expenditures alone, Wilmington still posted among the highest rates of growth.”
Within the city budget, expenditures on public safety, utility service, and environmental protection made up a smaller share of the total in 2004 than they had in 1994. Consuming an increasing share of city spending over the period were debt service, transportation, cultural resources, and parks and recreation.
For New Hanover County, the categories that shrank as a share of total spending were human resources, debt service, and environment. Spending on public schools and public safety accounted for a larger share of the county budget in 2004 than in 1994.
Coletti observed that there are several potential explanations for Wilmington’s comparatively rapid increase in city and county spending during the past decade. Government officials may have been responding to especially high operating costs or increasing demand for public services. Another possibility, however, is that local government in Wilmington and New Hanover County has grown beyond the necessities that most taxpayers want their governments to provide.
“Does Wilmington really have significantly better government than Raleigh or Asheville, which spend far less per resident?” Coletti asked. “That’s the question that citizens need to be asking themselves and the politicians who aspire to represent them in public office.”
The Wilmington edition of the JLF publication Citizen’s Guide to Local Spending will be distributed soon to thousands of officials, business executives, media organizations, community leaders, and residents across the region. An online version is available at the John Locke Foundation’s main website. Contact Summer Hood at 919-828-3876 or [email protected] for more information.