Elon’s town council members sat like bumps on the proverbial log this week as they heard a consultant tell them – over and over again – that the town’s finances have been “managed well.”
What the consultant meant by that – he cited it repeatedly – is that the town has a lot of money in the bank.
What the consultant didn’t say, and which no member of the council thought to utter, is that the same figures can show how grossly the municipality has overtaxed its hapless residents.
In assessing the sufficiency of their reserves, municipalities, and their consultants, often translate their savings accounts into percentages based on the town’s budget.
So, for instance, Elon has the equivalent of about 180 percent of its annual expenditures in a savings account – formally known as a “fund balance.” Most of these funds, or about 120% of the budget is deemed “unassigned,” or not (yet) obligated.
In either case – and whether calculated by percentage of its revenues, or percentage of its expenditures – Elon maintains more than a year’s worth of annual revenues in the town’s savings kitty.
[Editorial continues below two charts from the Davenport Public Finance.]
That really means that Elon has overtaxed its residents so much, year after year, that the savings account continues to grow – and we might emphasize, it has grown dramatically.
So much so, in fact, that the town could suspend all tax collections for a year, and still have almost half of its savings money left over.
In fact, the amount has almost doubled over the past five years, growing from $8.7 million in the bank to $15.4 million.
And when there’s money in the bank, politicians inevitably want to spend it.
So, Elon’s town council has been looking at a host of frivolous projects on which it can squander the cumulative revenues of its residents.
Most notably, town officials have become enamored of building a new Taj Mahal-like municipal building as a part of a laughably irrelevant “downtown master plan.” (In case the council hadn’t noticed, most of the “downtown” is occupied by Elon University. Even most of what’s left of the so-called “business district,” also called “downtown,” is actually owned by the university, as well.)
By the consultant’s own description, the proposed three-story town hall structure has so much extra room, beyond what is needed for actual municipal services, that the town could “rent out” space on the second and third floors to private entities.
What an incredible waste of money, and one that is planned to be ridiculously, and expensively, overbuilt from the outset.
We’ve long been surprised by how passive Elon residents have been in allowing their town government to overtax them – year after year.
Some local residents lobbied their governments to stick as closely as possible to a “revenue neutral” tax rate after the house values escalated dramatically during the last property revaluation in 2023.
Instead, Elon’s town council plowed ahead with an increase 14 percent above anything remotely “revenue neutral” in 2023. And it kept that high rate in effect for the current fiscal year.
But this being a municipal election year, now’s the time for at least a few disgruntled, over-taxed residents to step forward to offer themselves for service on the town council.
Otherwise, all Elon residents are likely going to continue to have their pockets raided of hard-earned cash which will be diverted into the town’s ever-growing piggybank.
