For years now the town of Oak Island has been struggling to pay for what has turned out to be a huge financial boondoggle–its sewer system. A news story from 2013 explains it as follows:

A sewer system project started in 2004 ran about $100 million over budget. Originally, council had estimated the cost of the project to be $42 million. In the end, the project’s final cost was over $140 million leaving the town in a massive debt.

Now, residents have to foot the bill to pay the town’s bond debt which has many people thinking of moving away.

So what does this mean for home owners in this tiny town of around 6800 residents in Brunswick County? As of the most recent rate increase, put in place over the summer, every household is paying a minimum charge of $108.86 a month or $1306.32 a year. The median pre-tax household income for the town is $47,861. This means that the typical household in the town is paying nearly three percent of their pre-tax income just for water and sewer. And for the half of the families living below the median the percentage is even higher. A poorer household earning $35000 a year is forking over almost 4% of its income to flush its toilets and wash its dishes. The fact is that these water and sewer bills are not just extremely high but also constitute an incredibly regressive tax.

As an important aside, it should be emphasized that the income figures are pre-tax and these bills are paid with after tax dollars. This means that as a percentage of a families disposable income, which is much more relevant, they are much higher.