January 28, 2007
RALEIGH – The average resident of the median North Carolina county paid nearly $1,135 to fund city and county governments in 2005. That number is up 1.3 percent from 2004 and 7.5 percent from 2003, according to a new report from the Center for Local Innovation.
Click here to view and here to listen to Chad Adams discussing the By The Numbers report.
Despite the increase, local taxes and fees actually declined slightly as a percentage of personal income, according to the report. “Though county and municipality revenues rose faster than inflation and property growth, income rose even more, with the local tax and fee burden falling from 4.66 percent of per-capita personal income in 2004 to 4.55 percent in 2005,” said report author Michael Lowrey, a JLF policy analyst.
Among the state’s largest cities, Charlotte ($2,113 per person), Wilmington, Asheville, Durham, and Chapel Hill had the highest tax burdens. They topped the list of 29 municipalities with at least 25,000 residents. Jacksonville ($1,036 per person), Thomasville, Kannapolis, Goldsboro, and Burlington ranked lowest in tax and fee burden among the larger cities.
Three coastal communities – Kill Devil Hills, Oak Island, and Carolina Beach – had the highest local per-person tax burdens among the 91 N.C. communities with populations between 5,000 and 24,999 people. The report ranks each of these communities, along with 200 municipalities with populations between 1,000 and 4,999 people.
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. Lowrey 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.
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 state residents’ personal income. 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].