S. Ellis Hankins
RALEIGH -
Don't underestimate the influence of the Realtors in the legislative debate about transfer taxes. They gave $600,000 to lawmakers last year. They've targeted advertising in home districts of legislators. "It's scaring the heck out of a lot of them," said state Sen. Eleanor Kinnaird. "The reality is the Realtors scuttled the [budget] agreement," said Rep. Paul Luebke.
The Realtors are doing all of this to keep North Carolinians from having the right to vote on a local transfer tax that has been used in some counties to lower or hold down property taxes and improve infrastructure.
The Realtors admit that more schools, increased water and sewer capacity, better roads and protection of open spaces for parks and recreation are needed and essential to sound residential development. Land transfer taxes can pay for those necessary public facilities, while holding down property tax rates.
One statewide poll found that, by a margin of nearly 8 to 1, the public favored the land transfer tax over property taxes as a way of raising new revenues for public facilities. On average, a 1 percent transfer tax would generate the equivalent of 10 percent of a county's property tax revenues. The average person would pay it every eight to 10 years when he or she sells or buys a house. In contrast, property taxes are paid every year.
What's the alternative to a land transfer tax? Higher property and sales taxes and increased water and sewer rates.
Right now counties are raising property taxes because they don't have enough money to pay for Medicaid and the demands for infrastructure caused by North Carolina's rapid population growth -- 75,000 people since the legislature convened in January. That's a new Asheville or Jacksonville. By 2030 there will be 12 million North Carolinians, a 50 percent increase that will make us the seventh-most populous state in the country.
Local governments and the state will not be able to cope with such rapid growth with existing sources of revenues. Already 114 communities are under restrictions on growth because of inadequate wastewater treatment capacity. Many schools are overcrowded, dilapidated or both. A recent study shows North Carolina's urban and rural roads are overly congested or below standard. This year we'll lose 100,000 acres of farms, forests and natural areas to development -- nearly 50,000 since the General Assembly convened.
At the state level we need to let people vote on bond proposals for schools, clean water, transportation, land and water conservation and affordable housing for seniors and others.
The General Assembly also should let the people vote on alternate ways to get these public facilities built, including a local land transfer tax.
(S. Ellis Hankins is executive director of the N.C. League of Municipalities and president of the Partnership for North Carolina's Future.)
All rights reserved. This copyrighted material may not be published, broadcast or redistributed in any manner.