HomeMy WebLinkAboutAgenda - 03-06-2008-6a1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: .March 6, 2008
Action Agenda
Item No. (p ~q
SUBJECT: Potential Uses of Land Transfer Tax Proceeds
DEPARTMENT: County Manager/Budget PUB<_IC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Draft Statement of Intent Regarding Laura Blackmon or Rod Visser,
Uses of Land Transfer Tax Proceeds 919-245-2300
Proposed Resolution Regarding Donna Coffey, 919-245-2151
Uses of Land Transfer Tax Proceeds
PURPOSE: To discuss options for the use of proceeds from a .4% land transfer tax, if
approved by voters on the May 6, 2008 ballot, and subsequently implemented by the Orange
County Board of Commissioners.
BACKGROUND: At the February 19, 2008 regular meeting, the Board of Commissioners
adopted a resolution calling an advisory referendum for May 6, 2008 on the question of whether
to levy a land transfer tax. This tax of four-tenths percent on eligible real property transactions
was provided for in the 2007 Session Laws enacted by the Narth Carolina General Assembly as
a local revenue option available to county governments. If Orange County voters approve this
measure, and County Commissioners implement it subsequently in May 2008 (following a 10-
day public notice), the levy of the tax could begin as early as July 1, 2008.
The Orange County Commissioners discussed the potential use of proceeds at their February
12, 2008 work session and agreed that clarity and simplicity are essential to effectively
communicating to the public the Board's plans for using any revenue from any newly
implemented revenue sources. Consistent with information presented in late summer 2007 and
which the Board has reviewed and discussed on a number of occasions since, the Board
expressed the view on February 12 that significant capital needs for both schools and parks that
are unfunded in the 2008-18 Capital Investment Plan would be appropriate objects of
expenditure for any new revenues.
At the Board's direction, staff drafted for the February 19, 2008 meeting a statement of the
proposed uses of the proceeds that would reflect the Board's February 12 discussion. On
February 19, the Board indicated that it was necessary to postpone a full discussion of that
subject until this March 6, 2008 regular meeting. That draft statement -revised to reflect the
Board's February 19 decision to pursue only a referendum on the land transfer tax option -
accompanies this abstract as a starting point for further Board deliberation on the intended uses
of local revenue option proceeds. Staff .have also drafted a resolution on use of proceeds,
based upon that document, which if adopted by the Board of Commissioners, would become
part of the foundation for educational .materials to be developed and disseminated this spring
with assistance from the Local Revenue Options Education Advisory Committee.
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FINANCIAL IMPACT: There is no direct financial impact associated with this agenda item.
Recently updated estimates developed by the County Budget Director suggest that based on
historical patterns, Orange County could expect proceeds for FY 2008-09 of approximately $3.5
million from a .4 percent land transfer tax, if approved by voters and implemented by the Board
of Commissioners to take effect on July 1, 2008.
RECOMMENDATION(S): The Manager recommends that the Board discuss the intended
uses of the proceeds from a .4% land transfer tax and adopt a modified version of the
accompanying resolution that reflects the Board's decisions at this March 6 meeting regarding
the intended uses of the proceeds from the prospective new revenue source.
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DRAFT
UPDATED 2/28/08
ORANGE COUNTY BOARD OF COMMISSIONERS
Statement of Intent Regarding Uses of Land Transfer Tax Proceeds
Based on discussion at the February 12, 2008 work session, the following represents a
starting point for establishing the formal position of the Orange County Board of
Commissioners regarding the prospective uses of the proceeds from a .4 % land transfer tax,
if approved by Orange County voters:
1. The Orange County Board of Commissioners believe:
• there are significant pressing school, park, and other County capital needs that are
currently unfunded or underfunded in the County's 10 Year Capital Investment Plan
• it is important to provide Orange County taxpayers with some relief from the pressure
to raise property taxes to address those, and other, County needs
• revenue from the land transfer tax alternative made available to counties by the
General Assembly during the 2007 Session provides an opportunity to gain some
measure of that relief
• if the County Commissioners do not have voter approval to levy a .4% land transfer
tax, that inevitably will lead to property tax increases to meet capital needs that MUST
be funded
• while the Board of Commissioners cannot say that property taxes will never be raised,
the availability of an alternative revenue source through the land transfer tax does
mean that property tax rates would be lower than they otherwise would be without the
land transfer tax .
• capital funding from the land transfer tax musfi be allocated in an equitable manner
between projects in the County's two school systems and other County capital
projects
• funding from the land transfer tax should be allocated to already identified projects the
County MUST accomplish, not to new projects that have not been previously
contemplated
• funding from the land transfer tax could be allocated to renovation projects as well as
to new facilities
• if additional funding does not come from the land transfer tax, it will inevitably come
from the property tax for projects that MUST be done, and non-mandated projects will
either be deferred or not completed
2. Therefore, the Orange County Board of Commissioners hereby states its intention to
use the proceeds from the land transfer tax for currently unfunded or underfunded
school and park projects. Proceeds from the land transfer tax in later years will be used
to address County Commissioner priorities as established in the County's 10 Year
Capital Investment Plan.
DRAFT
DRAFT
UPDATED 2/28/08
ORANGE COUNTY BOARD OF COMMISSIONERS
A Resolution Regarding Uses of Land Transfer Tax Proceeds
WHEREAS, there are significant pressing school, park, and other County capital needs that are
currently unfunded or underfunded in the County's 10 Year Capital Investment Plan; and
WHEREAS, it is important to provide Orange County taxpayers with some relief from the pressure to
raise property taxes to address those, and other, County needs; and
WHEREAS, revenue from the land transfer tax alternative made available to counties by the General
Assembly during the 2007 Session provides an opportunity to gain some measure of that relief; and
WHEREAS, if the County Commissioners do not have voter approval to levy a .4% land transfer tax,
that inevitably will lead to property tax increases to meet capital needs that MUST be funded; and
WHEREAS, while the Board of Commissioners cannot say that property taxes will never be raised,
the availability of an alternative revenue source through the land transfer tax does mean that property
tax rates would be lower than they otherwise would be without the land transfer tax; and
WHEREAS, capital funding from the land transfer tax must be allocated in an equitable manner
between projects in the County's two school systems and other County capital projects; and
WHEREAS; funding from the land transfer tax should be allocated to already identified projects the
County MUST accomplish, not to new projects that haven't been previously contemplated; and
WHEREAS, funding from the land transfer tax could be allocated to renovation projects as well as to
new facilities; and
WHEREAS, if additional funding does not come from the land transfer tax, it will inevitably come from
the property tax for projects that MUST be done, and non-mandated, projects will either be deferred or
not completed;
NOW, THEREFORE, BE IT RESOLVED THAT the Orange County Board of Commissioners hereby
states its intention to use the proceeds from the land transfer tax for currently unfunded or
underfunded school and park projects; and
BE IT FURTHER RESOLVED THAT proceeds from the land transfer tax in later years will be used to
address County Commissioner priorities as established in the County's 10 Year Capital Investment
Plan.
DRAFT