Budget stories don't tell the full story

It's budget season for local governments around the Triangle, and that's a challenge for any newspaper. In my old newsrooms, we used to refer to budget stories as "DBIs" -- dull but important. They give readers the most elemental news they need to know about government: how much their taxes will be and how their tax dollars will be spent. But pie graphs and spending charts do not a sexy story make.

This year the budget stories are especially important. In a year of stagnant personal income, falling home prices and rising fuel and food costs, all but one of 11 county and municipal governments in the Triangle region are proposing tax increases (Johnston County would hold flat.) Proposed increases range from 1.9 percent in Cary to 15 percent in Raleigh.

The News & Observer has given the budgets plenty of coverage. I looked back over the papers of the last two weeks and counted 26 articles about budget proposals in the Triangle's counties, cities and towns (some were in the N&O's community papers for North Raleigh, Durham, Chapel Hill and Cary). The stories have given readers the basic information about the tax increases.

They also have sown confusion. On an N&O online forum, readers asserted that the proposed Raleigh tax increase of 15 percent would come on top of a 41 percent average increase in property tax value, following the recent Wake County revaluation. Combined, they asserted, that's a double-whammy to the tax bill.

"The average property increase for Raleigh after the re-evaluation this year was 40 percent," one reader wrote. "If we now raise the rate 15 percent, our actual tax bill will be more than 50 percent more this year as compared to last year."

Not true. As required by state law, Wake County and Raleigh earlier this year calculated their "revenue-neutral tax rates -- meaning that total tax revenues after revaluation would be no more than before. Raleigh's proposed 15 percent increase would be on the lower, revenue-neutral rate.

The N&O stories generally carry boilerplate language saying the rate hike is "not including the increase that homeowners may face as a result of revaluation." But, as one reader has been persistently pointing out to me, the paper does not go the next step to say what the combined effect of revaluation and higher tax rate would be.

"While I am generally opposed to new taxes, there are two things that get me even more upset," Anthony Pecoraro of Raleigh wrote. "First, when we cannot get the truth out of our public officials, and secondly, the sloppy reporting that fails to challenge the officials, or even independently check the facts."

Pecoraro, a retired management consultant, has checked the facts and concluded that most homeowners in Raleigh will see tax increases well more than 15 percent. Please join me in trying to follow his explanation:

The average increase in Raleigh home values after revaluation was 41 percent, according to the Wake County Revenue Department (It was more for Wake County residential property -- 43 percent -- and for inside-the-Beltline property -- 73 percent.)

To reach a revenue-neutral tax rate, the county calculated a lower rate based on the overall countywide increase in property value. But the lower rate does not fully offset the average 41 percent increase in Raleigh residential property, because it also applies to nonresidential property, which had a much lesser value increase. So the tax bill for most residential property would go up even without a rate increase.

Add in the proposed 15 percent increase, and the tax bill for a $200,000 home in Raleigh whose value went up the average 41 percent would go from $870 to $1,077.44 -- a 23.82 percent increase, by Pecoraro's calculation. (That doesn't include the county tax.)

Is this a "true fact," as they say down at the precinct station? Yep, says Wake County revenue chief Emmett Curl. The revaluation on homeowner property was higher than for other kinds of property -- business personal property, motor vehicles, utilities -- because real estate is revalued only every eight years, while personal property is revalued annually.

Because of that, Curl said, if your home value went up 30 percent or more, you'd be paying more tax next year even if the tax rate stayed the same. I concur with Pecoraro that The N&O should have been telling readers this, and so does Metro Editor Thad Ogburn. "I agree, and we plan to do a story on that," he said.

The N&O has done some good budget coverage this year, by the way. A May 22 story rounded up all the proposed increases, reported taxpayers' protests and let officials try to explain themselves (big factors -- higher fuel bills, lower sales tax revenues). But out of those 26 stories, I saw only two that talked to taxpayers about the impact on their family budgets. Two stories about higher local taxes, through Friday, had made the front page. That gets back to the "DBI" factor.

"Budgets are important stories but not always the flashiest stories," Ogburn said. "I think that sometimes we don't put them on the front page as much as we should."