News & Observer | newsobserver.com | Growth, tax riddles for hard times

Columns by Steve Ford

Published: Jun 15, 2008 12:30 AM
Modified: Jun 15, 2008 02:05 AM

Growth, tax riddles for hard times

 

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Those of us whose livelihoods hinge on the willingness of customers in the Triangle to buy our products understand that as a general rule, more people living and working around here means more business.

That means we understand the positive role played by those who help us accommodate the population growth that both stems from and encourages economic growth -- including our friends in the real estate and development trades.

It's almost true that we can't live without 'em. But sometimes, when self-interest trumps public interest, it also seems that we can't live with 'em.

To be a proper community asset, growth has to be orderly. It has to exhibit a reasonable deference to natural features that stand to be obliterated, to the motorists who must travel on roads becoming clogged with traffic, to the taxpayers who must shell out as more schools are built and police officers are hired. Otherwise, growth is out of control.

Perhaps when the economy is booming and with the right mix of land uses (not too heavy on the housing), growth brings in enough new tax revenue to pay for itself. But that pleasant circumstance seems more typically like a mirage. We've become sadly acquainted with how growth can increase the strain on public budgets, and thus on you know who.

So commences the grand debate: How is the tax burden to be both reasonably set and fairly apportioned?

Deciding what kinds and levels of taxes are reasonable is a baseline responsibility we entrust to our elected officials. It's a nasty job, but somebody has to do it, figuring out a state, county or community's optimal level of services and then presenting the bill.

As a prime example: Are we satisfied with school systems that operate at the low end of adequacy? Or do we think that a higher-end approach to education represents a wise investment, one that we really can't afford not to make? To ask the question is to answer it, seems to me.

Yes, good schools come at a price, the same as good roads and transit systems and parks and police departments. And it seems fair that folks who make the growth engine rev faster should be asked to pay a little extra toward those growth-related costs. That's the sensible theory behind impact fees on new development.

It's also the rationale behind land transfer taxes, paid by sellers of property.

The General Assembly, with local governments begging for ways to broaden their tax base beyond the property tax, thought it made perfect sense to let voters decide whether their counties would be allowed to add a transfer tax to their revenue portfolio.

But the N.C. Association of Realtors regards the transfer tax -- branded as the "home tax" -- as the devil's work. Several counties have put the tax to a referendum. With real estate interests in full cry leading the opposition, so far it has been an anti-tax shutout. Now the game could be called -- you might say on account of darkness.

A bill cleared by a Senate committee last week would take the transfer tax option off the table, on the theory that any idea rejected at the polls 20 times in a row should be put out of its misery.

As it happens, the Realtors meanwhile were pledging to put up $10 million toward continuing "statewide efforts to protect private property rights and affordability." Translation: Every time the transfer tax rears its head, we will crank out enough alarmist rhetoric to knock it flat. Oh, the sellers will be hurt. The buyers will be hurt. Real estate dealers? What's that got to do with it?

Look, every industry group has a perfect right to defend its own well-being. But North Carolina over the years has seen far too many examples of industry narrow-mindedness -- no, that doesn't necessarily mean greed -- when it comes to shaping taxes and budgets.

Sometimes the light goes on, and the corporate types and their political friends make the link between critical public investments, particularly in education, and an ample revenue stream. But too often, the goal is simply to keep taxes down, even when that means diminished opportunity and quality of life for the state's people.

These are difficult times, with the economy sputtering, jobs tight, gasoline and food prices through the roof. The housing market is down, and it's no wonder folks in the house-selling business are trying to safeguard every nickel of profit. Who wants higher taxes on top of everything else?

Nobody. But to neglect civic investment is like letting a leaky roof go unrepaired while rot sets in. Government leaders doing their duty will make sure there's enough money on hand to keep us dry -- money raised under the banners of equity, good stewardship and shared sacrifice.

Editorial page editor Steve Ford can be reached at 919-829-4512 or at steve.ford@newsobserver.com.
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