Wake County leaders say property-tax increase needed

From left: Superintendent James Merrill, Commissioner Caroline Sullivan, school board Chair Christine Kushner, commissioners Chair James West, school board member Tom Benton.
From left: Superintendent James Merrill, Commissioner Caroline Sullivan, school board Chair Christine Kushner, commissioners Chair James West, school board member Tom Benton.

Wake County leaders signaled Monday that additional revenue from a property-tax increase will likely be needed soon to help keep up with population growth that is filling schools and stretching county services.

At a joint meeting Monday of the Wake County Board of Commissioners and the school board, school leaders laid out their budget challenges. Those include the following projections:

• More than 3,000 new students a year will join the system.

• State government will no longer automatically compensate for growth in student populations.

• The state will no longer budget for programs such as driver’s education.

• The system may be hard-pressed to pay for new programs to help struggling schools.

That information came after County Manager Jim Hartmann told the boards meeting at the PNC Arena that, despite what people may say, residential growth doesn’t pay for its costs.

“We cannot grow ourselves out of this,” James West, chairman of the all-Democratic board of commissioners, said after the meeting. “As we go through and analyze the data, it’s likely for us to have to get some additional revenue. And our primary source for getting that is through some reasonable tax increase.’’

With Republicans controlling the board of commissioners during all but two years since 2002, property taxes for education were mainly raised to build or open schools. The last tax increase not connected to a bond issue was in 2006. Since 2008, Wake schools have added more than 17,000 students, but the growth in county funding has not kept pace. The school system gets $115 less per student annually in local funds for operations.

Both boards are still in the early process of developing their budgets for the 2015-16 fiscal year, which begins in July. Commissioner Matt Calabria urged sharing information between the panels as the budgets are prepared.

“It would be helpful for us to be partners to really understand where the (school) board is coming from so we can support the school system as best we can,” Calabria said.

Monday marked the first joint meeting of both bodies since Democrats gained the majority on the board of commissioners last fall. They hold all seven commissioner seats.

Phil Matthews, the former Republican chairman of the commissioners, said in an interview he’s not surprised that a new Democratic majority would be talking about a tax increase.

Opposing view

“I don’t believe the majority of people in Wake County will support tax increases,” said Matthews, who was defeated by Calabria. “Downtown Raleigh – a certain group down there – will support it. The majority of people – retired people, people who live on fixed incomes – they won’t support it.”

Growth was a recurring theme during the joint meeting. The county’s population reached 1 million last year and is projected to double in the next 40 years. Wake is growing by 62 people a day, including 22 births, or the equivalent of a kindergarten class.

Hartmann said it takes property taxes from a $578,000 home to equal the cost of a single student.

“When we hear that argument that growth alone is going to pay for everything that they absorb, it’s not coming to us from the residential tax base,” he said.

Deputy County Manager Johnna Rogers said that preliminary estimates show a $12.9 million revenue surplus for the coming fiscal year if taxes aren’t raised. But she said they haven’t yet gotten the budget requests from county departments or the school system.

West said that programs should be driving funding, not the other way around. He said that if county leaders can make a good case, then people will support a tax increase.

“We can go and talk to the people,” West said. “Get their input and show them that this is something that is realistic based on the kind of county that we want to have,” he said. “We are a leading-edge county with a leading-edge school system.”

Monday’s meeting was far more cordial than past meetings between the Democratic-led school board and former Republican majority on the board of commissioners. Those meetings were often marked by insults and bickering.

“People want to see us getting the work done,” school board member Keith Sutton said after the meeting. “They want to see both boards working together and getting the job done.”

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