During the 2/22-23 budget work session this week, I proposed reducing property taxes 10 percent. There were several fallen faces and the shifting of sitting positions. Immediately, the Gang of Four (less one that day because Jerry Langley was not there) started making excuses as to why there could not be a tax reduction. The main reason is because they have plans for spending your surplus money.
A 10 percent reduction will reduce the present property rate by six cents. A penny on the tax rate in Beaufort County raises approximately $600,000. At roughly $600,000 per penny that is a 4.2 million dollar reduction in the taxes. Note that I did not propose reducing spending by 4.2 million dollars. I proposed reducing the amount of money we take from your pocket by 6 percent. In order to reduce the tax rate by 10 percent and keep spending the same, we need a surplus of 4.2 million dollars. That is, cash on hand that has no use.
Those who do not want to reduce taxes claim to have uses for the surplus. Among these are to fund the proposed mega sites (trash roll offs) or build the palatial addition to the jail. Given the argument that these expenses could not come up for a couple of years, they gave another useless answer. They said to stuff the money into a capital projects fund and let it sit there at virtually zero percent interest until needed.
You may begin hearing that the County does not have the money to give the decrease in taxes. Here are the facts presented by the County Finance Officer during the last day of these budget planning sessions. Our property tax collections are higher than estimated during the past two or three years. Our sales tax collections are up two or three million dollars during the past two years. Sales tax increases are probably the result of increased construction and people shopping closer to home because of the pandemic.
The Finance Officer started the report with the amount of money we had when the last fiscal year ended on June 30, 2021. This is convenient and allows her to work from a set of audited financial information. No guess work.
The report started with the $34,028,356 dollars we had in the bank on June 30, 2021 which was reduced by the $7,212,224 dollars of restricted money, reduced again by $2,030,790 in dollars that would be used to pay for items already purchased. This left $24,855,518 of money that could be spent for new things. The state requires us to plan for our bank account to never get below one month’s average expenses, so another reduction of $4,943,482 was made. That means we have $19,912,036 in money that is surplus, that could be used for anything.
There is another catch. We have to run the county from July1, 2021 until tax collections started coming in during November and December of 2021. We need about 3 million dollars per month for those five months or 15 million dollars. The three million is less than the $4,943,482 presented above because we have other revenue coming in. Now we have a surplus of $4,912,036 dollars.
There, you see we have the money to do a one-time tax reduction of 10 percent.
Wait, here is another catch. A good one. The scenario presented above brings us to the present time. We have still collected more in sales tax and property taxes since June 30, 2021 than expected. That money is not in these numbers. My estimate is there will be at least another two million in surplus by June 30, 2022. That totals 6.9 million dollars.
Do not allow those who would keep your money to get away with saying they have all of these un-explained and foggy needs. The accounting of County money presented above provides for full funding of everything in the so-called “continuation budget” and still we have a surplus of about 6.9 million dollars.
For those who are hung up on the jail, the State of North Carolina inspection reports for the last year have an important statement on the inspection reports. They say there are no issues of violations of state standards with this jail. The simple truth is the jail is in very good condition. After all we have spent millions on it during the past three years.
Not everyone pays property taxes directly, and they do pay property taxes in their rent/lease and of course property taxes are added into the cost of many things we buy. And we all pay property taxes on vehicles, boats etc. Then, just about everyone pays some kind of sales tax. That was the theory behind increasing sales taxes. With sales taxes, everyone pays, not just property owners. The problem is the Gang of Four has conveniently forgotten to take some of the tax burden off property owners by lowering property taxes. They just keep spending.
Two of the Gang of Four are running for re-election this year: Frankie Waters and Ed Booth. They need to be challenged to explain why they will not lower property taxes.
Yet another argument presented was that voters would be upset if we had to raise taxes in a year or so. Voters need to be taxed fairly and honestly. With honest management, taxes should go up and down depending on needs. Because of the possibility of a tax increase, the public would pay much closer attention to County Government. By not giving your money back to you, these elected officials are making themselves look good at your expense. This is costing you money.
And finally, about that capital reserve fund the Gang of Four talk about. That is money sucked out of the local economy that could be generating business growth and development. But these Elitists feel they know better what to do with your money than you do.
Beaufort County taxpayers deserve a 10 percent tax cut on our property taxes.
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