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HomeMy WebLinkAboutAgenda - 03-18-2008-3bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 18, 2008 Action Agenda Item No. ~_ SUBJECT: Resolution Regarding Planned Uses of Land Transfer Tax Proceeds DEPARTMENT: County Manager/Budget PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Proposed Resolution Regarding Laura Blackmon or Rod Visser, Uses of Land Transfer Tax Proceeds 919-245-2300 Approved Statement of Intent Regarding Donna Coffey, 919-245-2151 Uses of Land Transfer Tax Proceeds PURPOSE: To approve a resolution specifying the intentions of the Orange County Board of Commissione"rs 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 Board. 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 North 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 approved at their March 6, 2008 regular meeting a "Statement of Intent Regarding Uses of Land Transfer Tax Proceeds". The Board directed staff to bring back for the Board's action at the earliest opportunity a draft of a resolution to document the statement of intent. The adopted resolution would serve as a formal record of the Board's plans to use proceeds from a land transfer tax, if Orange County voters subsequently approve that tax. Staff and the County Attorney have revised the accompanying proposed resolution to reflect the Board's discussion at the March 6, March 11, and March 12 meetings. 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 adopt the accompanying resolution, or a modified version thereof, to document the Board's intended uses of the proceeds from the prospective land transfer tax. REVISED DRAFT UPDATED 3!13/08 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 precipitated by growth pressures and 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 alternatives to the pressure to raise property taxes to address these, and other, County needs; and WHEREAS, the levy of a .4% land transfer tax would provide a new County revenue source; and WHEREAS, if Orange County voters do not approve the levy of a .4% land transfer tax, greater property tax increases are inevitable to meet public school capital needs to meet the requirements of Schools Adequate Public Facilities agreements and ordinances (SAPFO); and WHEREAS, the Board of Commissioners has established guidelines to allocate transfer tax proceeds, including: a. funding will be allocated in an equitable manner between capital projects in the County's two school systems and other County capital projects; b. funding will be allocated to already identified projects to meet the requirements of SAPFO and to fund County park capital needs for the County parks, the land for which has already been acquired, and not to new projects that have not been previously contemplated; c. funding could be allocated to public school and County renovation projects as well as to new facilities; and WHEREAS, if additional funding does not come from the land transfer tax, the property tax will be the funding source for projects to meet the requirements of SAPFO, and other capital projects not required by law may have to be either 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 public school and park projects. 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. This, the 18th day of March, 2008. REVISED DRAFT APPROVED 03/06/08 ORANGE COUNTY BOARD OF COMMISSIONERS Statement of Intent Regarding Uses of Land Transfer Tax Proceeds Based on discussion at the February 72, 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 precipitated by growth pressures and 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 must 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 haven't 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.