August 17, 2010
Click here to view and here to listen to Dr. Terry Stoops discussing this Regional Brief.
RALEIGH — Days after opening the most expensive public school in North Carolina’s history, Watauga County commissioners will ask voters to approve a $1.9 million tax increase. The John Locke Foundation’s latest Regional Brief cites the history of the new Watauga High School while questioning the wisdom of a tax hike.
Watauga voters will head to the polls Aug. 31 to decide whether county commissioners can raise the local sales tax rate by 0.25 cents.
“I would say that Watauga County commissioners are asking for permission to fund another Boone-doggle, but there’s nothing funny about county government’s stewardship of taxpayers’ money,” said Dr. Terry Stoops, JLF Director of Education Studies. “Voters should consider the long-term costs of the new high school before they agree to give county commissioners greater power to raise their taxes.”
County commissioners say the projected $1.9 million raised from the sales-tax rate increase would help build new recreational facilities. Stoops and colleagues Dr. Michael Sanera, JLF Director of Research and Local Government Studies, and Joseph Coletti, Director of Health and Fiscal Policy Studies, examined the commissioners’ record.
“If past is prologue, this new money will not be spent wisely,” Stoops said. “County commissioners have not focused on their new high school as they’ve pushed for the sales tax increase, but voters should pay attention to the numbers associated with that school.”
The most important number is $79.5 million, Stoops said. “That’s the price tag for the new Watauga high school — the most expensive school ever built in the state,” he said. “It’s $17 million more expensive than a similar high school opening this year in Wake County.”
The difference between the cost of the Watauga and Wake County high schools equals almost nine years of revenue from the proposed sales tax increase, Stoops said. “In other words, if county commissioners had been more frugal with taxpayer funds lavished on their new high school, the county could have used these savings to meet the county’s recreational needs,” he said. “They could have delayed a sales tax increase for almost nine years.”
Another important number is $20 million, Stoops said. “That’s the size of the gap between the county schools’ five-year facility cost projections from 2006 and the spending on this single high school,” he said. “Because cost estimates for the high school were so far off-base, other new school and renovation needs have been left unmet.”
The new school has increased Watauga County’s debt burden dramatically, Stoops said. “Watauga County commissioners budgeted $7.9 million for debt payments in this budget year, compared to just $2.9 million in 2006.”
Now county commissioners are seeking a sales-tax rate increase equal to a 2.2-cent property tax increase, Stoops said. “Given their experience with the high school, should taxpayers now believe that commissioners would do a better job managing tax dollars while building new recreational facilities?”
Watauga’s plans raise other questions, Stoops said. “First, voters should ask whether the money raised from the higher sales tax actually would pay for recreational facilities,” he said. “Commissioners have made that promise, but it’s not legally binding. The money could go to any legal purpose, including paying debt service on the new high school.”
The county also has made dubious claims about the source of new sales-tax revenue, Stoops said. “The county commissioners’ chairman claims more than half of the new revenue from the tax increase would come from visitors,” he said. “Even if this is true, county residents still would face the equivalent of a 1-cent property tax increase.”
The election date should raise some red flags as well, Stoops said. “Scheduling the election on Aug. 31 is likely to suppress voter turnout,” he said. “Who will vote? Experience shows that the people who will benefit directly from the increased taxpayer spending are the ones most likely to show up at the polls.”
“A similar election in Robeson County earlier this month attracted less than 4.3 percent of registered voters,” Stoops explained. “The referendum passed. Now Robeson County residents will face a higher sales tax, even though less than 3 percent of the voting population approved it.”
Before Watauga County’s voters cast their ballots, they should consider some final questions, Stoops said. “If new county recreational facilities are a high priority, why haven’t county commissioners planned to provide for them through existing revenues?” he asked. “What low-priority activities have taken precedence over this high-priority need? Does this indicate inadequate planning by county staff and commissioners?”
Dr. Terry Stoops, Joseph Coletti, and Dr. Michael Sanera’s Regional Brief “Boone-Doggle: Watauga County’s proposed $1.9 million tax increase” 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].