News & Observer | newsobserver.com | Debate intensifies over taxes on homes

Published: May 11, 2007 12:00 AM
Modified: May 11, 2007 08:02 AM

Debate intensifies over taxes on homes

 

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WAKE COUNTY GROWTH BY THE NUMBERS

35,687 new residents moved here from July 2005 to June 2006, an average of 98 per day

7,566 more students enrolled in Wake public schools for 2006-2007 school year

$26.6 billion at least in new schools and public infrastructure needed by 2030

To help raise billions for new schools, roads and other public facilities, Wake County officials say they need new revenue options to prevent the county's property tax rate from skyrocketing. Among the options being debated at the General Assembly are an additional 1 cent in local sales tax and up to a 1 percent fee on the value of real estate sales. County leaders are also considering cutting the time between property revaluations from eight years to every four years.

WAKE COUNTY GOVERNMENT, BLUE RIBBON COMMITTEE ON THE FUTURE OF WAKE COUNTY

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RALEIGH - Jeffrey Groves, who has twin toddler sons, is trying to sell his Boylan Heights bungalow to buy a bigger house in Apex.

Like an ever-growing percentage of Wake County residents, he's from somewhere else. Groves moved from Indianapolis more than a decade ago, but he's willing to pay for his share of the communal growing pains: He would happily pony up a 1 percent fee on the sale of his home if the money went to the schools, he said.

"I think taxes in general need to be increased," Groves said. "If people want better schools, then we need to pay for it. I think having kids go to school in trailers sends a really bad message."

He might get his chance.

At least 46 bills in the General Assembly aim to give local governments across the state new taxing authority -- the result of intense lobbying by the the N.C. Association of County Commissioners and other organizations.

WakeUp Wake County, a group that advocates more limits on growth, recently hired a well-known lobbyist to push a fee of up to 1 percent on real estate transfers.

Other options under consideration include a penny increase in the local sales tax and school impact fees levied on new residential construction.

A bill sponsored by Sen. Janet Cowell, a Wake County Democrat, would let the county enact a menu of new taxes, but only if voters approve.

In the House, a bill sponsored by Wake Democratic Reps. Jennifer Weiss and Deborah Ross would levy a 1 percent tax on real-estate transfers for school construction -- a measure that would also require direct voter approval.

Both Wake bills are being considered by legislative committees in their respective chambers. To pass in the 2007 session, a bill must clear a vote in either the House or the Senate by a "crossover" deadline later this month.

As the cutoff approaches, there is a blitz of last-minute lobbying on Jones Street, with legislators hearing from local government officials, who want increased taxing authority, and well-heeled business groups looking to shoot them down.

"There are a lot of machinations going on behind the scenes," Weiss said. "There's a lot going on, and it's changing every day."

Agents oppose fee

The N.C. Association of Realtors has launched an aggressive marketing campaign aimed at mobilizing public opinion to stop the proposed transfer fee, which the group derides as a "Tax on the American Dream" cooked up by "Raleigh politicians."

The association is paying for the "Stop the N.C. Home Tax" yard signs springing up by local roadways, broadcast airtime and print ads in newspapers, including The News & Observer.

"It is referred to by proponents as a tax on growth," said Tim Kent, the group's executive vice president. "What it is is a tax on home sellers. This is a tax on home equity."

Kent said the transfer tax would price poor homebuyers out of the market and hurt young families trying to move into a bigger home or senior citizens who need the equity in their houses to finance long-term care.

Kent said the group wouldn't support a transfer tax even if it were paid by home buyers rather than home sellers. The real-estate group also opposes school impact fees, saying the cost of new schools should be paid through budget cuts and property taxes, so the burden is spread across the community.

A poll of 800 people commissioned by the group showed 81 percent opposed to a land transfer tax.

"The public is against this," Kent said.

Some Wake County residents potentially on the hook for the transfer tax said this week they would be willing to support the measure as long as the money went to build schools and keep property taxes in check.


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Staff writer Michael Biesecker can be reached at 829-4698 or michael.biesecker@newsobserver.com.

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