Speculators’ Tax in Alleghany? County commissioners seek tax grab based on guesses

by Dr. Terry Stoops

Former Director of the Center for Effective Education, John Locke Foundation

Senior Fellow, Fiscal Studies, John Locke Foundation

Director of Research and Local Government Studies

October 13, 2010

Key points:

Alleghany County commissioners are asking county voters to approve a $160,000 tax increase at a time of high unemployment. That amount would be equal to a property tax increase of 0.9 cents per hundred dollars of value.
County commissioners have tied the tax vote to speculation of lower state education spending next year, but other state and federal funding sources will likely offset any reductions without affecting the county budget.
County operating budget appropriations for fiscal year 2011 are $570,274 higher than in fiscal year 2009 – an amount 3.5 times as much as what the tax would generate. For example, the money from the new tax would not cover the operations of the office of the Register of Deeds ($173,555).
Any tax increase is permanent even if the needs are not.
Commissioners are under no obligation to use the new tax to pay for schools. All new revenues will go into the general fund and can be spent by commissioners for any legal purpose.
Since the special county taxing authority was established by the legislature in 2007, voters have turned down 68 of 85 requests for tax increases, sending the message that county commissioners must be more responsible stewards of taxpayers’ hard-earned money before voters will entrust them with tax increases.
Alleghany County voters should think twice before harming small employers with an open-ended tax increase based on speculation.