Mecklenburg bonds would boost state’s 2nd-highest tax burden

October 25, 2007

Click here to view and here to listen to Terry Stoops discussing this Regional Brief.

RALEIGH – Mecklenburg County is asking voters next week to approve $516 million in school construction bonds and increase an already high tax burden on low- and middle-income homeowners. That’s the key finding in a new John Locke Foundation Regional Brief.

“A successful vote would force taxpayers to shoulder the tax increases associated with the bond,” said report author Terry Stoops, JLF Education Policy Analyst. “That would intensify a tax burden that is quickly becoming unbearable for many people living in Mecklenburg County.”

Mecklenburg has failed to adopt changes that could help the county avoid additional taxes and long-term debt, Stoops said. “The local government has failed to implement the full range of school facilities alternatives and strategies that could accommodate enrollment growth without digging deeper into taxpayers’ pockets.”

Mecklenburg and any growing school system should adopt a long-term capital plan that focuses on priorities, Stoops said. “The county should redirect funds away from low-priority county initiatives and school programs to pay for critical construction and renovation projects,” he said. “The capital plan should fund only those projects that directly increase capacity in high-growth areas.

“The plan also should employ strategies that reduce construction and renovation costs,” Stoops added. “Savings from reducing the size of county and school bureaucracies should pay for school facilities. Mecklenburg should use existing revenue streams, rather than debt, to pay for capital expenditures. And the county should exhaust all possible school facilities alternatives.”

Mecklenburg County taxpayers already face one of the state’s highest tax rates and tax burdens, Stoops said. “Mecklenburg has North Carolina’s 17th-highest property tax rate, and the eighth-highest effective tax rate after adjusting for counties’ different revaluation cycles,” he said. “Factor in county population and average income, and Mecklenburg has the state’s second-highest per capita property tax burden and the second-highest combined tax burden.”

A recent study of new school construction costs shows Mecklenburg spends more money for new middle and high schools than comparable districts in North Carolina and the Southeast, Stoops said. “The extra spending is especially true for new high school buildings,” he said. “Charlotte-Mecklenburg high school construction costs 23 percent more per square foot and 22 percent more per student than high schools in peer districts.”

Local taxpayers are bankrolling Mecklenburg’s generous spending patterns, Stoops said. “With future school bonds, additional tax increases, and comparatively high construction costs, Mecklenburg County taxpayers will be forced to deal with an oppressive tax burden for years to come.”

Local governments call on their taxpayers to cover nearly 80 percent of the cost of school building expenses in North Carolina, Stoops said. “Voters across North Carolina have approved 74 school bond packages worth nearly $7.3 billion since 1995, but they’ve also rejected 20 bond proposals totaling nearly $2 billion.”

The state also provides four sources of school facilities funding, he said. Mecklenburg is projected to get nearly $45 million for school facilities in 2007-2008 through the corporate income tax, state lottery, and local-option sales taxes.

Options such as charter schools, early college high school programs, ninth-grade centers, virtual schools, satellite campuses, public-private partnerships, and adaptive reuse could help Mecklenburg save taxpayers from unnecessary expenses linked to enrollment growth, Stoops said. “These proven, cost-efficient solutions enhance educational opportunities for students and lighten the burden for county taxpayers.”

Mecklenburg County should rethink its strategy for addressing local school building needs, Stoops said. “The county must pursue a comprehensive school facilities strategy that is friendly to taxpayers and school officials alike.”

Terry Stoops’ Regional Brief, “Bond, School Bonds: School Bonds will leave taxpayers shaken down, not stirred,” is available at the JLF web site. For more information, please contact Stoops at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].