Durham News: Opinion

Penny tax-rate increase a step toward accountability

As Durham budgets go, the 2012-13 spending plan adopted last week by the City Council is the most responsible in recent memory.

The council funded all sworn law enforcement slots and appropriated additional monies for Operation Bull’s Eye, aimed at taming the city’s rowdier neighborhoods.

I could go on with a menu of good decisions infused in the $373.2 million budget – from pay increases for city workers to completion of the American Tobacco Trail, for example – but there is one decision that deserves special attention: the one-cent property tax increase for affordable housing.

As retirees making a go of it with an essentially fixed income at the mercy of inflation and implacably rising medical costs, my wife Betty and I would ordinarily object to the tax increase.

It is, after all, yet another redistribution of wealth mandated by the City Council. And while the amount is small, perhaps $15 to $20 a year for most homeowners, the increase is an instructive example of how government takes private money from the economy under the rubric of the common good.

Nonetheless, this tax increase has a benefit not readily discerned without an understanding of Durham’s history as a wastrel in providing decent, safe and affordable housing for a large low-income population.

The benefit comes as transparency in spending the $2.6 million a year expected to accrue from the tax increase. This is not the total annual amount going into affordable housing such as the $48 million Southside (formerly Rolling Hills) redevelopment effort, but the difference in funding is distinct and important.

This tax increase will provide a dedicated stream of dollars for affordable housing.

That means tracking the destination of those dollars down to the last cent will be easier for anyone who blanches at the thought of deciphering the city’s arcane accounting documents.

Financial accountability has been the bane of most affordable housing efforts in Durham for decades. Millions have been wasted on “partnerships” with mismanaged nonprofit housing outfits. The project formerly known as Rolling Hills, for example, cost the city $6 million in two failed attempts that left the area south of the Durham Freeway in ruins.

Those millions and other large sums were the shameful progeny of the City Council’s failure to exercise due diligence. They are gone, never to be retrieved.

With the looming Southside redevelopment in the old Hayti neighborhood, the City Council is taking substantial risks again. Not so St. Louis-based McCormack Baron Salazar, the developer behind the third attempt to make something out of Rolling Hills.

In fact, if this attempt works, MBS stands to eventually buy Rolling Hills for $1, having assumed only 8 percent of the financial risk. The city and the feds own the other 92 per cent.

As I noted in a previous column, the $2.6 million coming from the tax hike amounts to 0.007 percent of the $373.2 million budget. That’s an almost microscopic figure, a minnow among whales, but in setting a vital precedent for accountable spending, it is a start in the right direction.

The next step, also long overdue, is controlling the cost of subsidized affordable housing, whether apartments or houses. Some of the Rolling Hills apartments could cost up to $158,000.

Such costs are unaffordable almost anywhere. Except in Durham.