Friday, April 12, 2024

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Graham, NC 27253
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Whopping city tax increases proposed in Burlington, Mebane


The first local municipal budgets have been unveiled this week, and, we suspect taxpayers are going to be livid.

Understandably so.

We’ve long suspected that local officials would attempt to use the property revaluation as a pretext to slip in some more spending and fudge some extra taxes while trying to ignore or redefine the “revenue neutral” standard that state law requires to be stated when new tax rates are set after a property revaluation such as occurred in Alamance County recently.

But the first two budgets – from Burlington and Mebane – aren’t subtle, they’re not trying to “slip something in.”  They are bold, audacious raids on the taxpayers of their respective cities.

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The two managers are proposing 21 percent and 11 percent hikes in property taxes for their respective jurisdictions!

That takes a lot of gall.

Keep in mind some important definitions and distinctions.  The “revenue neutral” rate is the calculation of the property tax rate that is estimated to bring in the same amount of revenue as the former (pre-reval) rate would have in the next fiscal year.

Another distinction:  county and municipal governments set a tax rate, based on the property value, as expressed in an amount or rate per $100 in value.  So the proposed rates in Burlington and Mebane are 49.73 cents and 38 cents per $100 valuation. (That compares to 57.73 cents and 47 cents per $100 from the current fiscal year that ends June 30.)

Municipal property owners pay that tax rate on top of county property taxes.

Overall, property values in the county have shot up an astounding 79.43 percent, according to the county tax office. Mebane’s increases are higher than the countywide average, 80.73 percent, while Burlington’s are slightly lower than the countywide average, at 77.74 percent.

But the “revenue neutral” rates in each city would be  41 cents in Burlington and 34.21 cents in Mebane.

So the proposed budgets have tax rate increases of 8.73 and 3.79 cents above what would have been each city’s projected revenue neutral level.

But that’s just the pennies per $100.

The percentage increases above revenue neutral are more than 21 percent in Burlington and 11 percent in Mebane.

That’s a tax increase.

And a big one.

In fact, in each city, it is the largest tax increase we can remember in the past decade or more.

Another significant, late-breaking development: the updated calculations from the county’s tax administrator, as of May 1, now show even lower “revenue neutral” municipal rate projections – 39.42 cents in Burlington and 32.14 cents in Mebane – so that the tax increases represented by the managers’ respective budgets and recommended tax rates are even higher than those outlined above.

Now a further word about the two managers and the budgets they’ve presented.

There are not any finer people in government work than Burlington’s Craig Honeycutt, who once served as the county manager, and Mebane’s Chris Rollins, who did an earlier stint as Graham’s city manager.

They are, as best we can observe, diligent, generally conscientious, and competent public servants.

But both have a history of valuing the employees they work with more than the constituents they serve who pay the bills.  Nowhere is that more obvious than in the budgets each has prepared for fiscal year 2023-2024, which begins July 1.

We’ve noticed that there are typically two kinds of managers in city and county governments.

The first are those who represent the boards they serve, implementing budget and policy directives from the top down – i.e., from their elected councils (or, at the county level, from the county commissioners) to the bureaucrats in their jurisdiction’s employ.

The second type of manager is more akin to a union boss, representing the interests of the employees – to the elected officials.

And it seems to us, this is a major flaw in both managers’ approach to their budgets this year.

They are attempting to bamboozle their bosses (and the constituents they serve) into accepting big-spending and high-taxing plans, largely at the expense of regular taxpayers.

They’ve both also engaged in various deceptions and shell games, unworthy of their usual track records or of good government.

For instance, Burlington’s manager, Honeycutt, wants to claim that most of the impact of the increases is for higher salaries for the police, which, in fairness to him, his city council adopted last fall.

Of course, at the time, those were only partial year salaries – and were funded, more or less, for the rest of the fiscal year from unspent money, since there were significant vacancies in the city’s police department, which is what prompted the council to grant such lavish raises in the first place.

But now, the real price tag (the full year cost) becomes apparent – and it is huge: about $3.2 million. Now Honeycutt has tacked on significantly higher salaries for firefighters ($6,500 each), as well, at a cost of $1.1 million.

But he conveniently neglected to mention to his city council that his budget also includes across-the-board raises for all employees (4 percent) plus an additional kitty (of 2 percent) for potential merit raises, total price tag of another $1.2 million in raises.

He’s also included all manner of additional spending for various departments.

Excuse us, but we doubt most Burlington residents suffer from amnesia.  It was just last week that the council was asked to consider a whopping $3.6 million for Astroturf on three soccer fields! (Which, for reasons unknown, they wanted to spend fast – i.e., before the start of the new fiscal year.)

Rollins, for his part, has included a huge “cost-of-living” raise, 6 percent, plus another kitty for so-called “merit raises,” which is just another ruse for paying out higher salaries, but disguising it as somehow discretionary during budget season. All told, there’s almost $1.1 million in higher salaries – not including the benefits to employees from higher health insurance premiums and retirement contributions – which are usually taken for granted by administrators, even though they cost the taxpayers a pretty penny.

See the pattern? Government employees over taxpayers at every turn.

It wouldn’t take a regular taxpayer long to find enough things that could be eliminated altogether or delayed for a year or two in order to cut down, or cut out, the huge tax increase each manager is proposing.

In Mebane, another of Rollins’ ploys is to recommend a new special fund which he repeatedly calls “restricted.”  He envisions diverting the equivalent of 3 cents of the 3.79-cent increase for future capital projects – such as another fire station, a new police station, and a recreation facility and swimming pool for which there is absolutely no demonstrated actual need.

Of course, he wants to draw your attention there, rather than to all the other discretionary spending – for things like new cars and trucks, $100,000 worth of “wayfinding” signs and some sort of entrance sign into the city along N.C. 119.  We suspect most taxpayers would rather keep that extra money in their own pockets.

Rollins repeatedly stressed that the new restricted fund is to be carefully guarded against being raided for other purposes.

Oh, sure.

We just know that politicians on the city council – and city managers – will resist going to any pot of money they have sitting around to fund whatever newest project they want.

And, just by the way, both Mebane and Burlington have huge pots of money already – in so-called “fund balances,” or long-term savings accounts – which really represent excess revenues from past overtaxation of their residents that the cities have stockpiled.

Mebane, for instance, has an unobligated pool of savings of more than $14 million, an amount equal to 42 percent of its total budget available for expenditure from its savings – compared to the state’s minimum requirement of 8 percent.

These are the funds that have always been available, as described, for special capital needs – new fire stations, city hall/library expansions, etc.  Or, in Mebane, for instance, for the new fire station or police station that he says are on the horizon. (We frankly question whether there’s any real municipal need, or reason, for building another recreation facility, complete with a pool – i.e., $15 million future costs that could be slashed right away.)

The other anomaly in both managers’ budgets is the assumption that additional growth – in either property taxes, sales taxes, fees, etc. – is somehow about to stop.

On the contrary, it is clear that the county – and every town and city within it – is growing, and there is every reason to believe it will continue to do so.

Thus far this year, most of the attention from taxpayers has seemed to focus on the county’s five commissioners, with voters trying to extract assurances that the commissioners will keep the tax rate at, or close to, the revenue neutral rate.

But while taxpayers have been honed in on their county taxes (and, granted, those taxes apply to everyone), they need to keep a lookout for the huge raid on their pocketbooks being devised, at least in Burlington and Mebane, for their city taxes.

Commissioners, in fact, have generally been outspoken about intending to keep taxes flat by adopting a revenue neutral approach at the county level.

But not a single council member – in either Burlington or Mebane – raised a yellow flag, much less a red one, over the spending/taxing plans outlined this week.

At least Mebane city councilman Jonathan White encouraged Mebane citizens to “let them know” what they think of the budget plan.  Citizens in both Mebane and Burlington better do so, promptly and decisively.

Otherwise, they’re about to be in for the largest municipal tax increase they’ve ever experienced.

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