CARY - Passage of Wake County's $970 million school bond issue was an important first step in addressing the $5 billion needed for public school construction over the next 10 years. But approval of the bonds did not eliminate divisive issues such as mandatory year-round school assignments.

Wake has serious financial problems in dealing with the 7,000 to 8,000 additional students expected year after year. But Wake is a wealthy county. It has close to the largest base of taxable property in North Carolina. Nonetheless, over a decade of low taxes and minimal financial support for public schools is responsible for the $5 billion financial hole facing voters over the next 10 years. Additionally, that low level of support is at the root of parents' mistrust and the flat educational performance of our nationally acclaimed school system.

With real incomes stagnant for over five years for most people, voters have been reluctant to accept higher property taxes.

Over the last few months, our new grass-roots group, WakeUP Wake County, has been discussing with members of the General Assembly the need for an alternative funding source for Wake's public schools, i.e., an impact fee or a property transfer tax. Our message is that growth doesn't pay for itself and that the entire burden of paying for growth shouldn't be borne by the property tax.

One common theme we hear is: "Wake hasn't stepped up to the plate," meaning that Wake has the lowest effective tax rate of any county in the Triangle and among urbanized counties. "Effective rate" refers to an adjustment made for varying rates of revaluation. (See http://www.ncacc.org/taxrates07.html). It is not the actual rate but allows for comparison among counties.

Effective rates elsewhere in the region range from 60 cents to 81 cents (Orange County) per hundred dollars of valuation, compared to Wake's effective rate in 2006 of 53 cents. The county has been consistently below the state average, currently 58 cents.

Put another way, property owners elsewhere in the Triangle are paying 13 percent to 50 percent more property tax on a comparably priced house than those in Wake.

The attitude among some in the legislature has been: if Wake government isn't willing to raise taxes, and if voters are apathetic and don't care about over-crowded schools, then why should we give it more money? (Please don't shoot the messenger.)

The county's historically low tax rate results in penalties in its share of state revenues. Mecklenburg County, where the tax rate is 50 percent higher than in Wake, gets double the lottery proceeds -- while Wake has higher lottery ticket sales. And when a bipartisan group of Wake legislators propose using lottery revenues for financing school bonds, and then can't agree with others in the General Assembly on the allocation formula for the counties -- figure it out for yourself. And when WakeUP advocates for impact fees or transfer taxes to ease the burden of future increases in property taxes -- figure it out for yourself.

Whatever the mechanism -- a school impact fee or transfer tax, or an increase in property tax -- Wake's public schools need more revenues. Admittedly, money alone is not the answer. But our public schools produce nationally lauded results with considerably less spending than the average American school system. If, for example, the average school system were the same size as Wake's, it would be spending $130 million to $195 million a year more than Wake (data from Standard and Poor's, 2004, on a per student basis.)

With fast-rising school construction costs straining county resources across the state, the need for generating additional local revenues is increasing. Several bills are expected to be introduced in the General Assembly calling for a menu of local options or elements thereof -- a transfer tax, an impact fee and a sales tax. Leaders of the Republican majority on the Wake County commissioners have recently come around to support a menu-of-options approach for generating additional revenues.

Six of the seven county commissioners supported the $970 million school bond referendum. Six of the seven supported the associated tax increase. In the face of highly organized and vocal opposition, on Nov. 7 voters stepped up to the plate and voted for the bonds. This included an increase in the property tax rate of 4.7 cents. They were told it was only a down payment and that more bonds and tax increases were likely within two or three years.

Now the question is: "Isn't it time for the state to step up to the plate?"

(Stan Norwalk is vice-chairman of WakeUP Wake County Inc. He can be reached at stann@nc.rr.com)

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