The URL can be used to link to this page

Home My WebLink AboutAgenda - 04-10-2007-4fORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 10, 2007 Action Agenda Item No. ~-~ SUBJECT: Resolution Supporting a Real Estate Transfer Tax for Orange County and Other North Carolina Counties DEPARTMENT: County Manager PUBLIC HEARING: (YIN) No ATTACHMENT(S): Draft Resolution NCACC Draft Resolution NCACC Estimated Real Estate Transfer Tax Revenues for NC Counties INFORMATION CONTACT: Laura Blackmon, 245-2300 PURPOSE: To approve a resolution supporting a real estate transfer tax for Orange County and other North Carolina counties. BACKGROUND: Orange County has supported additional revenue options for local governments for several years. For the 2007 North Carolina General Assembly Session, Orange County included in its legislative package a section noted Revenue Options for Local Government. A portion of this section read: Support legislation that authorizes a variety of revenue options for local governments to fund local government services. An overarching principle is that any local government revenue source that is presently available to one or more local governments in the state should be available to all local governments uniformly throughout the state. All local governments should, on a reasonable basis, have the authority to levy local option sales taxes, apply impact fees and/or taxes, utilize real estate transfer fees and/or taxes, etc. Orange County specifically notes its support for the ability of all local governments to apply impact fees and/or taxes and to implement real estate transfer fees and/or taxes. Senate Bill 1516, filed in the North Garolina Senate on March 27, 2007 by Senator Bob Atwater of Chatham County, would give all North Carolina counties alocal-option real estate transfer tax of up to one percent to help meet rising infrastructure needs. If approved, it would provide the 93 counties that do not have authority for a real estate transfer tax an option to hold a voter referendum to enact one. The real estate transfer tax is tied closely to the real estate market and generates money to pay for growth at the time it is needed. A tax would apply to both residential and commercial 2 property transactions. Counties in 36 states currently have authority to levy a real estate transfer tax. It should be noted that a real estate transfer tax has not impeded growth in the six North Carolina counties that already have one in place. ,According to figures from the U.S. Census Bureau, from July 1, 2000, through July 1, 2006, Camden County (34.7 percent growth) ranked second and Currituck County (30.7 percent) third in population growth among North Carolina counties. Pasquotank County came in 19th at 13.5 percent and Dare County was 20th at 13.2 percent. All four of those counties experienced growth in that time frame that was significantly above the state's growth rate of 10 percent. North Carolina Association of County Commissioners Executive Director David F. Thompson has stated, "Our counties' infrastructure needs are great. This is a revenue source that allows counties to broaden their tax base so the residential property taxpayer who has been in his house for 20 years isn't forced to pay an undue burden." The property tax base for Orange and other NC counties is not growing fast enough to keep pace with the demands caused by the rapidly growing population. As an example, North Carolina county Medicaid costs are increasing at nearly 10 percent annually, while the property tax base -the only source of revenue that county boards of commissioners have the authority to increase - is growing statewide at less than 7.5 percent annually. A real estate transfer tax is an equitable mechanism for making growth pay for its impacts that could generate an estimated $10,033,850 for Orange County and would enable Orange and other counties to address increasing Medicaid services costs (barring any relief from the state), school facilities needs, courthouse projects, jails, parks development, libraries, and other local government facility/service needs. With the deadline for the introduction of individual bills in the General Assembly having already passed, and assuming the Board approves the attached resolution, the County will need to work with the County's legislative delegation to ensure that Orange County is included in any real estate transfer tax bills that make their way forward during the remainder of the legislative session. FINANCIAL IMPACT: There is no financial impact associated with approval of the attached resolution. Initial projections from the North Carolina Association of County Commissioners estimate that Orange County could accrue $10,033,850 annually with the implementation of a one percent real estate transfer tax. RECOMMENDATION(S): The Manager recommends that the Board approve the attached resolution, authorize the Chair to sign the resolution, and direct the Clerk to the Board to forward copies of the signed resolution to Orange County's legislative delegation, the North Carolina General Assembly leadership, the other 99 North Carolina counties, and the North Carolina Association of County Commissioners. DRAFT ORANGE COUNTY BOARD OF COMMISSIONERS RESOLUTION SUPPORTING A REAL ESTATE TRANSFER TAX FOR ORANGE COUNTY AND OTHER NORTH CAROLINA COUNTIES WHEREAS, the properly tax is the only source of revenue over which counties have control; and 3 WHEREAS, the State of North Carolina requires counties to pay 15 percent of the state share of Medicaid - a program for which counties are not allowed to set policy, eligibility criteria, service options or provider rates; and WHEREAS, the total county share of Medicaid is now projected to eclipse $517 million during the 2007- 08 fiscal year; and WHEREAS, it is estimated that in the 2007-08 fiscal year, Orange County will spend $3,924,800 or approximately 2.4 percent of its expenditures for services to Medicaid eligible residents; and WHEREAS, other unfunded mandates from the state such as reduced school class sizes are forcing county property tax rates higher; and WHEREAS, the Norkh Carolina Department of Public Instruction's School Planning Section 2006 Long Range Facility Plans recently identified $9.7 billion of school facility needs statewide over the next five years; and WHEREAS, seven counties in North Carolina -Camden, Chowan, Currituck, Dare, Pasquotank, Perquimans and Washington -are all authorized by the General Assembly to levy a 1 percent real estate transfer tax; and WHEREAS, any revenue source that is made available to one county should be made available to all 100 counties; and WHEREAS, a priority goal of both the North Carolina Association of County Commissioners and Orange County is to seek legislation to allow all counties to enact any or all of several revenue options from among those that have already been authorized for any other county, including local option sales taxes, impact taxes and real estate transfer taxes; and WHEREAS, a real estate tax is tied closely to the real estate market and generates money to pay for growth at the time it is needed; and WHEREAS, a one percent real estate transfer taxis an equitable mechanism for making growth pay for its impacts that could generate additional funds for Orange County to help meet the demands for new classroom space and classroom improvements, development of parks, libraries and other infrastructure, and fund other critical needs; and WHEREAS, Sen. Bob Atwater of Chatham County has filed Senate Bill 1516, which would allow all counties that do not have authority fora 1 percent land transfer tax an option to hold a voter referendum to enact one; NOW, THEREFORE, BE IT RESOLVED that the Orange County Board of Commissioners urges the North Carolina General Assembly to authorize Orange County and all other North Carolina counties to enact at least an additional one percent real estate transfer tax to be used for any lawful expenditures. FURTHER BE IT RESOLVED that copies of this resolution be transmitted to the members of the General Assembly representing Orange County, the North Carolina General Assembly leadership, the other 99 North Carolina counties, and the North Carolina Association of County Commissioners. This the 10°i day of April, 2007. Moses Carey, Jr., Chair Orange County Board of Commissioners NCACC Draft Resolution 4 RESOLUTION SUPPORTING LOCAL-OPTION REAL ESTATE TRANSFER TAX WHEREAS, the property tax is the only source of revenue that counties have control over; and WHEREAS, the State of North Carolina requires counties to pay 15 percent of the state share of Medicaid - a program for which counties are not allowed to set policy, eligibility criteria, service options or provider rates; and WFIEREAS, the total county share of Medicaid is now projected to eclipse $517 million during the 2007- 08 fiscal year; and WHEREAS, it is estimated that in the 2007-08 fiscal year County will spend $ or approximately percent of its expenditures for services to Medicaid eligible citizens; and WHEREAS, other unfunded mandates from the state such as reduced school class sizes are forcing county property tax rates higher; and WHEREAS, the Department of Public Instruction's School Planning section 2006 Long Range Facility Plans recently identified $9.7 billion of school facility needs over the next five years, and $ in needs in Gounty; and WHEREAS, seven counties in North Carolina -Camden, Chowan, Currituck, Dare, Pasquotank, Perquimans and Washington -are all authorized by the General Assembly to levy a 1 percent real estate transfer tax; and WEIEREAS, any revenue source that is made available to one county should be made available to all 100 counties; and WHEREAS, a priority goal of the North Carolina Association of County Commissioners is to seek legislation to allow all counties to enact any or all of several revenue options from among those that have akeady been authorized for any other county, including local option sales taxes, impact taxes and real estate transfer taxes; and WHEREAS, the tax is tied closely to the real estate market and generates money to pay for growth at the time it is needed; and WHEREAS, a 1 percent local-option real estate transfer tax could generate $ for County to help meet the demands for new classroom space and classroom improvements and fund other critical infrastructure needs; WHEREAS, Sen. Bob Atwater of Chatham County has filed Senate Bill 1516, which would allow all counties that do not have authority fora 1 percent land transfer tax an option to hold a voter referendum to enact one; NOW, THEREFORE, BE IT RESOLVED that the County Board of Commissioners urges the North Carolina General Assembly to authorize County to enact alocal-option, 1 percent zeal estate transfer tax to be used for any lawful purpose capital expenditures. FURTHER BE IT RESOLVED that copies of this resolution be transmitted to the members of the General Assembly representing County and to all 100 counties in North Carolina. Adopted this the day of , 20_ Estimated Land Transfer Revenue Based on 2005-2006 figures Estimated 1 % Transfer Counties Fee [~] [~] Alamance 8,129,410 Alexander 1,128,290 Alleghany 1,086,390 Anson 669,620 Ashe 2,816,080 Avery 3,332,220 Beaufort 2,782,740 Bertie 532,580 Bladen 783,510 Brunswick 35,103,390 Buncombe 24,736,630 Burke 2,636,030 Cabarrus 17,152,410 Caldwell 3,042,640 Camden 690,410 Carteret 15,655,170 Caswell 474,160 Catawba 8,465,310 Chatham 6,679,960 Cherokee 4,229,100 Chowan 970,460 Clay 2,357,030 Cleveland 2,899,920 Columbus 1,109,950 Craven 7,576,000 Cumberland 14,779,240 Currituck 4,916,560 Dare 10,797,190 Davidson 6,080,670 Davie 2,540,510 Duplin 1,667,030 Durham 25,704,913 Edgecombe 1,342,950 Forsyth 20,739,310 Franklin 3,342,190 Gaston 9,297,260 Gates 321,410 Graham 633,040 Granville 2,632,400 Greene 299,070 Guilford 33,990,400 Halifax 1,530,210 Harnett 4,694,240 Haywood 5,617,240 Henderson 10,535,060 Hertford 491,200 Hoke 2,071,870 Hyde 579,790 Iredell 17,139,640 Jackson 9,042,370 Johnston 11,241,240 Jones 229,460 Lee 2,395,870 Estimated 1% Transfer Counties Fee ~$~ ~$~ Lenoir 970,970 Lincoln 5,775,820 Macon 5,674,010 Madison 2,075,040 Martin 416,270 McDowell 2,030,790 Mecklenburg 111,954,595 Mitchell 1,213,120 Montgomery 1,782,420 Moore 8,110,725 Nash 6,021,010 New Hanover 32,699,930 Northampton 1,304,430 Onslow 11,246,020 Orange 10,033,850 Pamlico 2,003,320 Pasquotank 3,035,930 Pender 7,237,910 Perquimans 1,239,800 Person 2,120,260 Pitt 8,809,950 Polk 2,729,230 Randolph 4,580,700 Richmond 1,151,060 Robeson 1,924,590 Rockingham 2,789,080 Rowan 4,938,580 Rutherford 4,645,120 Sampson 1,108,760 Scotland 881,780 Stanly 2,034,470 Stokes 1,365,300 Surry 2,156,010 Swain 1,686,400 Transylvania 4,072,210 Tyrrell 2,066,670 Union 24,054,250 Vance 7,628,820 Wake 100,522,050 Warren 1,327,050 Washington 928,420 Watauga 7,331,080 Wayne 3,564,220 Wilkes 2,463,370 Wilson 2,831,500 Yadkin 719,700 Yancey 2,002,750 Total 776,951,083 t0