View Of Two Council Members: New proposed 2012-2013 Carolina Beach budget includes close to 50% property tax rate increase for our residents
- Published on Friday, 20 April 2012 21:13
- Written by Super User
By ROBERT LEWIS and STEVE SHUTTLEWORTH
Carolina Beach Town Councilmen
The linchpin of balancing the Carolina Beach Town budget this year is how to address the “revenue neutral” concept. As many of you know, revenue neutral is a term used to describe an increase or a decrease (rarely) in the ad valorum tax rate (property tax rate) to generate the same property tax income that was generated the previous year.
The New Hanover County reassessment of property values is now official. The resulting drop in overall property values in the town of Carolina Beach resulted in a shortfall of approximately $1,400,000 in property tax revenue.
Therefore the Town Manger has proposed (and some on Council agree) to increase the property tax rate 50% from 17.5 cents to .26 cents per $100.
This would put the entire burden of financing all budget deficits on property owners. As it sits today the town manager is proposing a close to 50% increase in the property tax rate to get to what he calls “revenue neutral”.
As Council members, when we look at this proposed huge tax rate increase for property owners in Carolina Beach, we find it difficult to just sit back and take this easy way out. This easy way is to agree to let our Town government continue to operate in the same spendthrift manner by increasing the tax rate on the town's property owners.
The question becomes….. Do you support this approach?
In the most recent budget workshop, the discussion around this topic resulted in the Mayor saying “I'm fine with it; if it ain’t broke don't fix it”. He is ready to approve the proposed 50% tax rate increase. He went on to state that no one, not one person he has spoken to, is opposed to a revenue neutral tax increase, once he explains it to them.
Just to give you some figures, here is a breakdown of your property taxes. The New Hanover County portion represents about 73% or your property taxes, and Carolina Beach portion is around 27% of your total property taxes. New Hanover County is balancing the budget, in part, by proposing an increase in its rate from their current .46.55 cents per $100 in value, to .55.4 Cents in $100 value. This is about a 20% increase. The Town of Carolina Beach, on the other hand, if our Town Manager has his way, would require an almost 50% tax rate increase. There are other local beach towns that cut costs and in past years did not establish a “revenue neutral’ tax rate thus not increasing the rate for their residents.
As we represent you on Town Council, a majority of us have voiced concerns about the financial impact of these taxes on all our residents, who include property and business owners. We have a number of residents on fixed incomes, many unemployed, many under-employed, and there are lots of us working multiple jobs to make ends meet. We feel it is very hard for your council representatives to just breeze over a budget and approve this huge tax rate increase without scrutinizing every line item and getting your opinions. Several of us also believe that to balance the 2012/2013 Carolina Beach budget, the Council and the Town Manager should look at not only the property tax rate, but at other sources of income, at more accurate revenue projections, and at ways for our Town government to spend less money. To raise more revenue, for instance, we recently voted for a modest increase in parking rates.
If you have followed the progress of your current Council, you have seen a fiscally responsible approach that addresses ways to provide you, the taxpayer, with a better value for your tax dollar. To site just a few things, we canceled the contract with our former Town Attorney, and are planning to hire a new firm with an anticipated savings for the town of over $100,000 a year. We restructured our approach to managing the cost of the large parcel of property (with motels), purchased years ago, for the unfunded State NC Aquarium Pier project. The restructuring included reinvesting in the properties in order to upgrade their perceived value to future prospective buyers. This reinvestment also benefits the Town by increasing the properties' rental revenues to offset their annual costs.
This new approach has taken what was to be a $350,000 annual cost to the taxpayer and reduced to a projected break even! Again, we could have continued to do business as it was done in the past on these two items, but instead, we chose to invest our time in working to save our taxpayers significant amounts of money.
A number of us on council are continuing to work on areas where we think there could be tax savings for you, the people we represent. We have actually gone out and researched the methods and budgets of other local town governments and identified some ideas that we could incorporate to lower some of our annual costs. One possible idea would be to not replace some of our current and soon to be open management and staff positions. This could be accomplished by either combining the leadership responsibilities of a couple departments, to one person, or by just not replacing some positions already vacated. This could result in a situation in which no one who is presently working for the Town would lose his or her job. The Town of Carolina Beach has been doing some of this over the past 6-8 years. From the height of the growth boom, the Town has reduced the overall work force form 115 people to the current 89.5. This was done through attrition and outsourcing (which means we pay a firm to provide the services formerly delivered by full time employees). Some on council feel the Town should continue to do this and not grow the size of the local government workforce. This could allow the Town to retain current employees at their current pay levels. Even New Hanover County has made significant cuts in expenditures over the past year by not replacing open positions, as personnel retire or voluntarily leave their County jobs. Last year the County also incorporated a forced number of unpaid days off per employee to reduce the cost of labor by 5%.
We are presently questioning the need to replace openings in our operations, police and parks departments with full time employees.
Our thought is, instead of hiring full-time replacements for open positions, we could hire part-time or temporary personnel to fill in functions during the peak tourist season so that the Town's taxpayers would not bear the labor costs in the off season. Many communities like ours utilize this method to keep their costs in line. We are also looking into the costs of maintaining the Town's many vehicles. The Town is presently paying to maintain vehicles for Police, Fire, Operations, Utilities, Planning and Zoning and Parks and Rec. Many towns have gone to vehicle pools so that multiple departments can access vehicles when needed, so that all vehicles are utilized to their maximum value. We do not think this is appropriate for either the Police or Fire departments, where workers need each vehicle to provide for public safety, but surely the Planning and Parks departments could share vehicles and operations, and utilities workers may be able to do the same. We are almost at the point where the Town now has a vehicle for every employee. Council members have also suggested some energy saving ideas used by many private companies focused on town hall and our other buildings that could potentially save money and at the same time support new “Go Green” initiatives. Call us crazy, but we believe that these money saving ideas seem to have some merit.
We have encouraged every council member and the Mayor who may have different opinions concerning the budget to write something to provide you the taxpayer their position.
We encourage you to voice your opinion on the budget and on issues that you are concerned about by emailing or calling your Mayor and Town Council as we work towards a budget resolution.
Tell us if you support raising the property tax rate by 50% in order to be "revenue neutral". Maybe we are, as one Council member said, “wasting our time” working through this. If you believe this to be true, let us know that too.
Authored by Council Members: Bob Lewis and Steve Shuttleworth.
Again these are opinions are strictly expressed by the authors of this letter and do not reflect the opinions of the entire Carolina Beach council. Town of Carolina Beach main number: (910) 458-2999
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