HomeMy WebLinkAbout7-a - Report on the Orange County Tax Equity Study
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: January 23, 2018
Action Agenda
Item No. 7-a
SUBJECT: Report on the Orange County Tax Equity Study
DEPARTMENT: County Manager’s Office
ATTACHMENT(S):
1 – Orange County Tax Equity
Presentation
2 – Orange County Tax Equity Full Report
INFORMATION CONTACT:
Bonnie Hammersley, 919-245-2306
Travis Myren, 919-245-2308
PURPOSE: To receive a report on the Orange County Tax Equity Study completed by David
Mitchell, CCM Economics, LLC.
BACKGROUND: In 1987, the County was engaged in a study of tax equity between the County
and each of the municipalities within the County. That study, known as the Wicker Study,
examined the different levels of municipal and county taxes that residents of Mebane, Carrboro,
Hillsborough, and Chapel Hill paid relative to the levels of government provided benefits that
they received. Residents of Orange County who did not reside in a municipality were also
examined.
In 2017, the County contracted with David Mitchell, Ph.D. of CCM Economics to update the
previous tax equity report. This report has updated and expanded upon the previous study of
tax equity. The CCM report examines the budgets of local and county governments and
combines this information with data from other data sources from the federal and state level to
determine how much, on a per capita basis, each citizen is paying in taxes. This tax expenditure
is then compared to the level of government provided benefits that each citizen is receiving on a
per capita basis. A survey of Orange County residents was also employed to understand which
government provided goods and services are being utilized and by whom.
Dr. Mitchell will explain the methodology employed in his study, the intricacies of measuring tax
equity, the results of the resident use survey, tax expenditures per capita, and the services
received by residents of the County on a per capita basis based on where each resident lives.
FINANCIAL IMPACT: The Orange County Tax Equity Study was funded using consulting
services expenditures available in the County Manager’s Office.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or
1
ethnic background; age; military service; disability; and familial, residential or economic
status.
• GOAL: ENABLE FULL CIVIC PARTICIPATION
Ensure that Orange County residents are able to engage government through voting and
volunteering by eliminating disparities in participation and barriers to participation.
RECOMMENDATION(S): The Manager recommends the Board receive the report on tax
equity and ask questions as desired.
2
OOra
n
g
e
C
o
u
n
t
y
T
a
x
E
q
u
i
t
y
St
u
d
y
BO
C
C
M
e
e
t
i
n
g
Ja
n
u
a
r
y
2
3
,
2
0
1
8
Hi
l
l
s
b
o
r
o
u
g
h
,
N
C
C.
C
.
M
.
E
c
o
n
o
m
i
c
s
,
L
.
L
.
C
.
Att
a
c
h
m
e
n
t
1
3
Ou
t
l
i
n
e
o
f
P
r
e
s
e
n
t
a
t
i
o
n
•
In
f
o
r
m
a
t
i
o
n
a
b
o
u
t
m
y
s
e
l
f
a
n
d
m
y
f
i
r
m
•
Un
d
e
r
s
t
a
n
d
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
•
Ar
e
a
o
f
S
t
u
d
y
—
O
r
a
n
g
e
C
o
u
n
t
y
•
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
•
Re
s
u
l
t
s
•
Qu
e
s
t
i
o
n
s
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
4
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
•
Da
v
i
d
M
.
M
i
t
c
h
e
l
l
,
P
r
e
s
i
d
e
n
t
•
Ph
.
D
.
i
n
E
c
o
n
o
m
i
c
s
i
n
2
0
0
1
•
Ec
o
n
o
m
i
c
a
n
a
l
y
s
i
s
,
f
o
r
e
c
a
s
t
s
,
e
c
o
n
om
i
c
i
m
p
a
c
t
s
t
u
d
i
e
s
f
o
r
1
7
y
e
a
r
s
•
Re
c
e
n
t
P
a
s
t
C
l
i
e
n
t
s
:
N
a
t
i
o
n
a
l
P
a
r
k
Se
r
v
i
c
e
;
U
S
C
e
n
s
u
s
B
u
r
e
a
u
;
S
t
a
t
e
o
f
So
u
t
h
C
a
r
o
l
i
n
a
;
S
t
a
t
e
o
f
M
i
s
s
o
u
r
i
;
E
s
t
e
r
o
,
F
l
;
G
a
i
n
e
s
v
i
l
l
e
,
F
l
,
C
h
e
r
a
w
,
SC
;
U
n
i
v
e
r
s
i
t
y
o
f
S
C
;
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
5
Un
d
e
r
s
t
a
n
d
i
n
g
T
a
x
E
q
u
i
t
y
•
Be
n
e
f
i
t
s
P
r
i
n
c
i
p
l
e
—
p
a
y
t
a
x
e
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
b
e
n
e
f
i
t
s
re
c
e
i
v
e
d
•
Ab
i
l
i
t
y
-
t
o
-
p
a
y
p
r
i
n
c
i
p
l
e
—
h
i
g
h
e
r
i
n
c
o
m
e
h
o
u
s
e
h
o
l
d
c
a
n
a
f
f
o
r
d
t
o
p
a
y
mo
r
e
i
n
t
a
x
e
s
,
s
o
t
h
e
y
s
h
o
u
l
d
•
Co
n
s
i
d
e
r
t
w
o
h
o
u
s
e
h
o
l
d
s
,
P
o
o
r
a
n
d
R
i
c
h
,
w
i
t
h
i
n
c
o
m
e
s
o
f
$
2
5
,
0
0
0
an
d
$
1
5
0
,
0
0
0
•
Lo
c
a
l
g
o
v
e
r
n
m
e
n
t
p
r
o
v
i
d
e
s
o
n
e
g
o
od
,
l
o
c
a
l
e
d
u
c
a
t
i
o
n
,
w
h
i
c
h
c
o
s
t
s
$7
,
0
0
0
p
e
r
s
t
u
d
e
n
t
p
e
r
y
e
a
r
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
6
Un
d
e
r
s
t
a
n
d
i
n
g
T
a
x
E
q
u
i
t
y
•
Be
n
e
f
i
t
s
p
r
i
n
c
i
p
l
e
—
b
o
t
h
h
o
u
s
e
h
o
l
d
s
p
a
y
$
7
,
0
0
0
i
n
t
a
x
e
s
.
P
o
o
r
ho
u
s
e
h
o
l
d
p
a
y
s
2
8
%
o
f
t
h
e
i
r
i
n
c
o
m
e
an
d
r
i
c
h
h
o
u
s
e
h
o
l
d
p
a
y
s
4
.
6
%
o
f
th
e
i
r
i
n
c
o
m
e
.
I
s
t
h
i
s
f
a
i
r
?
B
o
t
h
pa
y
i
n
g
a
n
d
r
e
c
e
i
v
i
n
g
t
h
e
s
a
m
e
d
o
l
l
a
r
va
l
u
e
o
f
o
u
t
p
u
t
,
b
u
t
p
a
y
i
n
g
d
i
f
f
e
r
e
n
t
p
e
r
c
e
n
t
a
g
e
s
f
o
r
i
t
.
•
Ab
i
l
i
t
y
t
o
p
a
y
p
r
i
n
c
i
p
l
e
—
p
o
o
r
h
o
u
s
e
h
o
l
d
p
a
y
s
5
%
o
f
t
h
e
i
r
i
n
c
o
m
e
($
1
,
2
5
0
)
a
n
d
r
i
c
h
h
o
u
s
e
h
o
l
d
p
a
y
s
1
0
.
2%
o
f
t
h
e
i
r
i
n
c
o
m
e
(
$
1
2
,
7
5
0
)
.
I
s
th
i
s
f
a
i
r
?
P
o
o
r
h
o
u
s
e
h
o
l
d
i
s
r
e
c
e
iv
i
n
g
a
n
e
x
t
r
a
$
5
,
7
5
0
o
f
v
a
l
u
e
t
h
a
t
th
e
y
d
i
d
n
’
t
p
a
y
f
o
r
(
$
7
,
0
0
0
-
$
1
,
2
5
0
)
a
n
d
r
i
c
h
h
o
u
s
e
h
o
l
d
i
s
l
o
s
i
n
g
$5
,
7
5
0
t
h
a
t
t
h
e
y
p
a
i
d
f
o
r
b
u
t
d
i
d
n
’
t
g
e
t
(
$
1
2
,
7
5
0
-
$
7
,
0
0
0
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
7
Un
d
e
r
s
t
a
n
d
i
n
g
T
a
x
E
q
u
i
t
y
•
Co
n
s
i
d
e
r
t
h
e
U
S
I
n
c
o
m
e
T
a
x
•
To
p
1
%
o
f
a
l
l
i
n
c
o
m
e
e
a
r
n
e
r
s
e
a
r
n
e
d
2
0
.
6
%
o
f
A
G
I
b
u
t
p
a
i
d
3
9
.
5
%
o
f
fe
d
e
r
a
l
i
n
c
o
m
e
t
a
x
e
s
•
Bo
t
t
o
m
5
0
%
o
f
a
l
l
i
n
c
o
m
e
e
a
r
n
e
r
s
e
a
r
n
e
d
1
1
.
3
%
o
f
A
G
I
b
u
t
p
a
i
d
2
.
8
%
of
f
e
d
e
r
a
l
i
n
c
o
m
e
t
a
x
e
s
•
Th
e
o
n
l
y
w
a
y
t
o
h
a
v
e
c
o
m
p
l
e
t
e
l
y
e
q
u
i
t
a
b
l
e
t
a
x
e
s
i
s
f
o
r
e
v
e
r
y
ho
u
s
e
h
o
l
d
t
o
e
a
r
n
a
n
i
d
e
n
t
i
c
a
l
i
n
co
m
e
a
n
d
e
v
e
r
y
h
o
u
s
e
h
o
l
d
t
o
h
a
v
e
id
e
n
t
i
c
a
l
p
r
e
f
e
r
e
n
c
e
s
f
o
r
t
h
e
c
o
n
s
u
m
p
t
i
o
n
o
f
g
o
v
e
r
n
m
e
n
t
s
e
r
v
i
c
e
s
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
8
Ar
e
a
o
f
S
t
u
d
y
–
O
r
a
n
g
e
C
o
u
n
t
y
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
OCTE9
Ar
e
a
o
f
S
t
u
d
y
–
O
r
a
n
g
e
C
o
u
n
t
y
(p
e
r
c
e
n
t
p
o
p
u
l
a
t
i
o
n
c
h
a
n
g
e
1
9
8
7
-
2
0
1
5
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
0
5
0
1
0
0
1
5
0
2
0
0
2
5
0
3
0
0
3
5
0
4
0
0
Ca
r
r
b
o
r
o
Ch
a
p
e
l
H
i
l
l
C
i
t
y
Ch
a
p
e
l
H
i
l
l
-
-
O
C
O
n
l
y
Hi
l
l
s
b
o
r
o
u
g
h
Me
b
a
n
e
C
i
t
y
Me
b
a
n
e
-
-
O
C
o
n
l
y
Un
i
n
c
o
r
p
o
r
a
t
e
d
Or
a
n
g
e
C
o
u
n
t
y
Du
r
h
a
m
-
C
h
a
p
e
l
H
i
l
l
M
S
A
No
r
t
h
C
a
r
o
l
i
n
a
(
m
i
l
)
US
A
(
m
i
l
)
10
Ar
e
a
o
f
S
t
u
d
y
–
O
r
a
n
g
e
C
o
u
n
t
y
(p
e
r
c
a
p
i
t
a
i
n
c
o
m
e
d
i
s
t
r
i
b
u
t
i
o
n
s
)
Pe
r
C
a
p
i
t
a
In
c
o
m
e
Pe
r
c
e
n
t
o
f
US
A
Pe
r
c
e
n
t
o
f
NC
Pe
r
c
e
n
t
o
f
Ch
a
p
e
l
H
i
l
l
Ca
r
r
b
o
r
o
20
,
5
5
8
7
1
.
0
6
79
.
3
1
3
6
.
4
1
Ch
a
p
e
l
H
i
l
l
56
,
4
5
9
1
9
5
.
1
6
2
1
7
.
8
2
1
0
0
.
0
0
Hi
l
l
s
b
o
r
o
u
g
h
24
,
5
6
7
84
.
9
2
9
4
.
7
8
4
3
.
5
1
Me
b
a
n
e
29
,
1
3
4
1
0
0
.
7
1
1
1
2
.
4
0
5
1
.
6
0
Un
i
n
c
o
r
p
o
r
a
t
e
d
36
,
1
9
6
1
2
5
.
1
2
1
3
9
.
6
5
6
4
.
1
1
Or
a
n
g
e
C
o
u
n
t
y
36
,
3
8
0
1
2
5
.
7
5
1
4
0
.
3
5
6
4
.
4
4
No
r
t
h
C
a
r
o
l
i
n
a
25
,
9
2
0
8
9
.
6
0
10
0
.
0
0
4
5
.
9
1
US
A
28
,
9
3
0
1
0
0
.
0
0
1
1
1
.
6
1
5
1
.
2
4
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
11
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
•
Su
r
v
e
y
o
f
C
i
t
i
z
e
n
s
•
He
l
p
s
t
o
d
e
t
e
r
m
i
n
e
w
h
o
i
s
u
s
i
n
g
w
h
a
t
•
Pa
r
k
s
,
L
i
b
r
a
r
i
e
s
,
r
e
c
y
c
l
i
n
g
,
p
u
b
l
i
c
t
r
a
n
s
i
t
,
se
n
i
o
r
c
e
n
t
e
r
,
w
i
f
i
/
t
e
c
h
n
o
l
o
g
y
,
h
e
a
l
t
h
c
a
r
e
•
Su
r
v
e
y
s
e
n
t
o
u
t
o
v
e
r
p
o
s
t
a
l
a
n
d
e
m
a
i
l
,
f
a
c
e
b
o
o
k
,
e
t
c
.
•
Ex
a
m
i
n
i
n
g
t
a
x
e
s
p
a
i
d
a
n
d
g
o
v
e
r
n
m
e
n
t
s
e
r
v
i
c
e
s
r
e
c
e
i
v
e
d
b
y
c
i
t
i
z
e
n
s
br
o
k
e
n
d
o
w
n
b
y
c
i
t
y
a
n
d
i
n
c
o
r
p
o
r
a
t
e
d
a
r
e
a
•
Fe
d
e
r
a
l
i
s
m
i
s
s
u
e
s
•
Pu
b
l
i
c
v
s
.
p
r
i
v
a
t
e
g
o
o
d
s
(
e
x
c
l
u
d
a
b
l
e/
n
o
n
-
e
x
c
l
u
d
a
b
l
e
&
r
i
v
a
l
/
n
o
n
r
i
v
a
l
)
•
Ex
a
m
i
n
e
c
i
t
y
a
n
d
c
o
u
n
t
y
b
u
d
g
e
t
s
,
s
o
c
i
o
e
c
o
n
o
m
i
c
d
a
t
a
,
t
a
x
d
a
t
a
,
e
t
c
.
•
Sn
a
p
s
h
o
t
m
e
t
h
o
d
o
l
o
g
y
—
s
o
m
e
t
a
x
r
e
v
e
n
u
e
s
c
o
l
l
e
c
t
e
d
t
o
d
a
y
a
r
e
s
h
i
f
t
e
d
t
o
r
e
s
e
r
v
e
f
u
n
d
s
to
b
e
s
p
e
n
t
i
n
t
h
e
f
u
t
u
r
e
.
T
h
i
s
m
a
k
e
s
‘
t
a
x
e
s
c
o
l
l
e
c
t
e
d
’
l
o
o
k
b
i
g
g
e
r
t
h
a
n
‘
s
e
r
v
i
c
e
p
r
o
v
i
d
e
d
’
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
12
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Fe
d
e
r
a
l
G
o
v
t
St
a
t
e
G
o
v
t
Lo
c
a
l
G
o
v
t
$2
5
$1
0
$3
0
F:
$
1
0
0
S:
$
2
5
L:
$
1
0
Ap
p
a
r
e
n
t
Ta
x
B
u
r
d
e
n
F:
$
7
0
S:
$
1
5
L:
$
5
0
Ac
t
u
a
l
T
a
x
Bu
r
d
e
n
13
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
20
1
6
G
o
v
e
r
n
m
e
n
t
r
e
c
e
i
p
t
s
a
n
d
s
p
e
n
d
i
n
g
i
n
b
i
l
l
i
o
n
s
Al
l
G
o
v
t
F
e
d
e
r
a
l
S
t
a
t
e
/
L
o
c
a
l
Go
v
e
r
n
m
e
n
t
R
e
c
e
i
p
t
s
(
a
l
l
s
o
u
r
c
e
s
)
5,
3
1
9
.
6
3
,
4
9
7
.
8
2
,
3
7
2
.
9
Ta
x
e
s
3,
7
4
4
.
3
2
,
1
5
3
.
6
1
,
5
9
0
.
8
So
c
i
a
l
I
n
s
u
r
a
n
c
e
T
a
x
e
s
1,
2
5
1
.
9
1
,
2
3
2
.
6
1
9
.
3
Cu
r
r
e
n
t
T
r
a
n
s
f
e
r
R
e
c
e
i
p
t
s
f
r
o
m
o
t
h
e
r
s
/
g
o
v
t
s
21
4
.
2
7
3
.
4
6
9
1
.
9
In
c
o
m
e
f
r
o
m
a
s
s
e
t
s
13
1
.
6
4
9
.
2
8
2
.
4
Ex
p
e
n
d
i
t
u
r
e
s
f
o
r
g
o
o
d
s
/
s
e
r
v
i
c
e
s
2,
6
5
5
.
2
9
7
8
.
1
1
6
7
7
.
1
Tr
a
n
s
f
e
r
P
a
y
m
e
n
t
s
t
o
p
e
r
s
o
n
s
2,
7
9
6
.
3
2
,
0
4
7
.
9
6
9
5
.
2
Tr
a
n
s
f
e
r
P
a
y
m
e
n
t
s
t
o
o
t
h
e
r
g
o
v
t
6
0
4
.
4
In
t
e
r
e
s
t
66
6
.
3
4
7
4
.
1
1
9
2
.
3
Su
b
s
i
d
i
e
s
59
.
2
5
8
.
7
0
.
5
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
14
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(O
r
a
n
g
e
C
o
u
n
t
y
R
e
v
e
n
u
e
s
a
n
d
E
x
p
e
n
d
i
t
u
r
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Ch
a
r
g
e
s
f
o
r
se
r
v
i
c
e
s
5%
In
t
e
r
g
o
v
e
r
n
m
e
n
t
al
10
%
Tr
a
n
s
f
e
r
s
f
r
o
m
ot
h
e
r
f
u
n
d
s
1%
Pr
o
p
e
r
t
y
T
a
x
e
s
72
%
Sa
l
e
s
T
a
x
10
%
Li
c
e
n
s
e
s
,
Pe
r
m
i
t
s
,
In
v
e
s
t
m
e
n
t
s
0%
Mi
s
c
e
l
l
a
n
e
o
u
s
2%
Co
m
m
u
n
i
t
y
Se
r
v
i
c
e
s
6%
General Government 3% Public
Sa
f
e
t
y
10%
Hu
m
a
n
S
e
r
v
i
c
e
s
19%
Ed
u
c
a
t
i
o
n
38
%
Su
p
p
o
r
t
Se
r
v
i
c
e
s
6%
De
b
t
S
e
r
v
i
c
e
14
%
Tr
a
n
s
f
e
r
s
t
o
Fu
n
d
s
4%
15
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(H
i
l
l
s
b
o
r
o
u
g
h
R
e
v
e
n
u
e
s
a
n
d
E
x
p
e
n
d
i
t
u
r
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Pr
o
p
e
r
t
y
T
a
x
68
%
Sa
l
e
s
T
a
x
14
%
Li
c
e
n
s
e
s
a
n
d
Pe
r
m
i
t
s
2%
In
t
e
r
g
o
v
e
r
n
m
e
nt
a
l
2%
In
v
e
s
t
m
e
n
t
ea
r
n
i
n
g
s
0%
Fu
n
d
B
a
l
a
n
c
e
Tr
a
n
s
f
e
r
s
7%
Ot
h
e
r
3%
De
b
t
I
s
s
u
a
n
c
e
4%
Ad
m
i
n
9%
Pl
a
n
n
i
n
g
5% Safety & Wellness 1% Public Space 4% Information Services 0%
Po
l
i
c
e
31
%
Fi
r
e
13
%
Fl
e
e
t
Ma
i
n
t
e
n
a
n
c
e
3%
St
r
e
e
t
s
11
%
Po
w
e
l
l
B
i
l
l
3%
So
l
i
d
Wa
s
t
e
11
%
Ce
m
e
t
e
r
y
0%
Ec
o
n
o
m
i
c
De
v
e
l
o
p
m
e
n
t
5%
Ot
h
e
r
4%
16
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(M
e
b
a
n
e
R
e
v
e
n
u
e
s
a
n
d
E
x
p
e
n
d
i
t
u
r
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Pr
o
p
e
r
t
y
t
a
x
(a
l
l
)
54
%
Sa
l
e
s
T
a
x
17
%
Ut
i
l
i
t
y
Fr
a
n
c
h
i
s
e
T
a
x
4%
Fi
r
e
D
i
s
t
r
i
c
t
T
a
x
3%
Po
w
e
l
l
B
i
l
l
2%
Sa
n
i
t
a
t
i
o
n
F
e
e
s
2%
Pe
r
m
i
t
s
2%
Tr
a
n
s
f
e
r
s
2%
Fu
n
d
B
a
l
a
n
c
e
Tr
a
n
s
f
e
r
s
9%
Ot
h
e
r
5%
Po
l
i
c
e
19
%
Fire 15%
Ad
m
i
n
24
%
Pu
b
l
i
c
W
o
r
k
s
23
%
Pl
a
n
n
i
n
g
4%
Ec
o
n
o
m
i
c
De
v
e
l
o
p
m
e
n
t
6%
Pa
r
k
s
9%
17
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(C
a
r
r
b
o
r
o
R
e
v
e
n
u
e
s
a
n
d
E
x
p
e
n
d
i
t
u
r
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Pr
o
p
e
r
t
y
T
a
x
57
%
Sa
l
e
s
T
a
x
16
%
Ot
h
e
r
T
a
x
e
s
3%
In
t
e
r
g
o
v
e
r
n
m
e
nt
a
l
7%
Fe
e
s
a
n
d
Pe
r
m
i
t
s
6%
Se
r
v
i
c
e
Ch
a
r
g
e
s
1%
Fu
n
d
Ba
l
a
n
c
e
Tr
a
n
s
f
e
r
s
5%
Ot
h
e
r
R
e
v
e
n
u
e
1%
Ot
h
e
r
Fi
n
a
n
c
i
n
g
So
u
r
c
e
s
4%
Ad
m
i
n
9%
Economic Development 4% Information Technology 5% Police 12% Fire 11%
Pl
a
n
n
i
n
g
6%
Tr
a
n
s
p
o
r
t
a
t
i
o
n
5%
Pu
b
l
i
c
W
o
r
k
s
32
%
Pa
r
k
s
8%
De
b
t
S
e
r
v
i
c
e
5%
Ot
h
e
r
3%
18
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(C
h
a
p
e
l
H
i
l
l
R
e
v
e
n
u
e
s
a
n
d
E
x
p
e
n
d
i
t
u
r
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Ge
n
e
r
a
l
F
u
n
d
s
60
%
Tr
a
n
s
i
t
21
%
St
o
r
m
w
a
t
e
r
2%
Pa
r
k
i
n
g
2%
Ho
u
s
i
n
g
2%
Ca
p
i
t
a
l
P
r
o
j
e
c
t
s
1%
Ot
h
e
r
5%
De
b
t
Se
r
v
i
c
e
7%
Po
l
i
c
e
24
%
Ad
m
i
n
21
%
Fi
r
e
15
%
Pa
r
k
s
11
%
Li
b
r
a
r
y
5%
En
v
i
r
o
n
m
e
n
t
24
%
19
Ap
p
r
o
a
c
h
t
o
a
n
a
l
y
z
i
n
g
t
h
e
i
s
s
u
e
o
f
t
a
x
e
q
u
i
t
y
(P
r
o
p
e
r
t
y
a
n
d
I
n
c
o
m
e
T
a
x
e
s
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
20
Su
r
v
e
y
r
e
s
u
l
t
s
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Or
a
n
g
e
Co
u
n
t
y
Ca
r
r
b
o
r
o
C
h
a
p
e
l
H
i
l
l
H
i
l
l
s
b
o
r
o
u
g
h
M
e
b
a
n
e
U
n
i
n
c
o
r
p
Pa
r
k
s
22
.
7
1
2
.
5
1
1
.
3
3
0
.
7
3
0
.
5
2
5
.
7
Bl
a
c
k
w
o
o
d
28
.
6
7
.
1
1
5
.
2
4
2
.
1
2
5
3
2
.
8
Ce
d
a
r
G
r
o
v
e
19
.
6
9
.
8
1
1
1
5
.
8
2
5
2
6
.
6
Ce
n
t
r
a
l
R
e
c
Ce
n
t
e
r
20
.
2
2
.
4
4
.
4
3
6
.
2
3
3
.
3
2
3
.
2
Ef
l
a
n
d
-
C
h
e
e
k
s
10
.
3
2
.
4
3
.
3
1
1
.
7
5
0
1
1
.
8
Fa
i
r
v
i
e
w
12
.
9
2
.
4
1
.
1
2
5
8
.
3
1
4
.
9
Ho
l
l
o
w
R
o
c
k
15
.
5
1
9
.
5
1
8
.
9
1
6
0
1
3
.
4
Li
t
t
l
e
R
i
v
e
r
/
Na
t
u
r
e
A
r
e
a
23
.
9
9
.
8
8
.
7
2
3
.
7
4
1
.
7
3
2
Ri
v
e
r
P
a
r
k
/
Fa
r
m
e
r
'
s
M
k
t
60
.
2
5
1
.
2
3
1
.
9
8
3
6
6
.
7
6
3
.
3
So
c
c
e
r
.
c
o
m
Ce
n
t
e
r
13
.
3
7
.
7
7
.
7
2
2
.
8
1
6
.
7
1
2
.
8
Li
b
r
a
r
y
36
.
9
4
9
.
3
3
7
.
9
4
0
.
7
3
2
.
1
3
2
.
6
Ma
i
n
L
i
b
r
a
r
y
59
.
6
2
6
.
8
1
5
.
9
8
6
.
4
7
5
7
1
.
2
Ca
r
r
b
o
r
o
B
r
a
n
c
h
10
.
3
3
4
.
2
1
0
.
3
8
.
7
0
6
.
4
Cy
b
r
a
r
y
8.
6
3
3
.
3
6
.
8
8
.
6
0
5
CH
P
u
b
l
i
c
L
i
b
r
a
r
y
50
.
2
9
0
.
2
9
0
.
1
3
5
.
1
2
7
.
3
3
3
.
5
On
l
i
n
e
R
e
s
o
u
r
c
e
s
55
.
5
6
1
.
9
6
4
.
4
6
2
.
8
5
4
.
5
4
7
.
3
21
Su
r
v
e
y
r
e
s
u
l
t
s
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
Or
a
n
g
e
Co
u
n
t
y
Ca
r
r
b
o
r
o
C
h
a
p
e
l
H
i
l
l
H
i
l
l
s
b
o
r
o
u
g
h
M
e
b
a
n
e
U
n
i
n
c
o
r
p
Tr
a
n
s
p
o
r
t
a
t
i
o
n
2.
8
6
2
.
2
4
.
5
4
.
2
1
.
6
Hi
l
l
s
b
o
r
o
u
g
h
Co
n
n
e
c
t
o
r
3.
1
4
.
8
3
.
3
7
.
3
8
.
3
0
.
5
Or
a
n
g
e
-
C
H
Co
n
n
e
c
t
o
r
4.
7
9
.
5
4
.
4
8
.
4
8
.
3
2
Di
s
a
b
l
e
d
/
P
a
r
a
1.
8
2
.
4
1
.
1
2
.
1
0
2
Se
n
i
o
r
C
e
n
t
e
r
Tr
a
n
s
1.
6
7
.
1
0
0
0
2
Se
n
i
o
r
C
e
n
t
e
r
s
17
.
7
1
6
.
6
1
9
.
6
2
0
.
5
0
1
7
.
3
Pa
s
s
m
o
r
e
17
.
5
7
.
1
8
2
5
.
5
0
2
1
.
1
Se
y
m
o
u
r
18
.
3
2
6
.
2
3
1
.
1
1
5
.
4
0
1
3
.
4
He
a
l
t
h
C
l
i
n
i
c
s
5.
6
1
.
6
3
.
3
6
1
6
.
6
5
.
5
De
n
t
a
l
4.
6
0
1
.
1
5
.
2
1
6
.
7
5
.
9
Me
d
i
c
a
l
(H
i
l
l
s
b
o
r
o
u
g
h
)
7.
7
0
2
.
2
1
1
.
6
2
5
8
.
3
Me
d
i
c
a
l
(
C
H
)
3.
8
4
.
8
6
.
5
2
.
1
8
.
3
2
.
4
Re
c
y
c
l
i
n
g
87
8
5
.
4
8
5
.
9
8
5
.
4
9
1
.
7
9
4
.
2
Wi
F
i
63
.
6
6
9
5
1
.
1
6
0
.
5
4
9
.
9
68.422
Re
s
u
l
t
s
(M
o
n
i
e
s
p
a
i
d
o
u
t
b
y
c
i
t
i
z
e
n
s
pe
r
c
a
p
i
t
a
)
Or
a
n
g
e
Co
u
n
t
y
Me
b
a
n
e
H
i
l
l
s
b
o
r
o
u
g
h
C
h
a
p
e
l
H
i
l
l
C
a
r
r
b
o
r
o
U
n
i
n
c
o
r
p
o
r
a
t
e
d
Fe
d
e
r
a
l
I
n
c
o
m
e
5,
9
4
9
.
8
9
2
,
5
4
1
.
7
6
4
,
9
5
0
.
3
4
7
,
9
3
9
.
1
9
4
,
2
3
1
.
8
0
4
,
7
8
9
.
5
1
St
a
t
e
I
n
c
o
m
e
1,
4
4
2
.
3
6
6
6
6
.
3
5
1
,
3
0
5
.
5
9
1
,
9
2
1
.
6
1
9
7
0
.
7
2
1
,
1
7
0
.
5
8
Pr
o
p
e
r
t
y
1,
2
3
5
.
0
1
2
,
1
3
0
.
4
5
2
,
5
7
9
.
4
3
2
,
2
7
5
.
5
9
2
,
0
4
6
.
2
6
1
,
0
1
6
.
1
8
Re
t
a
i
l
S
a
l
e
s
74
1
.
3
6
5
9
3
.
7
0
5
0
0
.
6
3
7
7
2
.
9
0
7
5
6
.
9
5
7
3
7
.
6
1
Mo
t
o
r
v
e
h
i
c
l
e
66
.
5
9
6
6
.
8
7
7
7
.
1
1
8
2
.
5
4
7
1
.
4
9
4
7
.
0
3
Ot
h
e
r
T
a
x
e
s
(
A
n
i
m
a
l
,
B&
W
,
U
t
i
l
i
t
y
,
e
t
c
.
)
3.
2
2
9
7
.
4
0
3
.
3
7
3
6
.
1
1
3
0
.
0
7
2
.
6
6
Li
c
e
n
s
e
s
a
n
d
P
e
r
m
i
t
s
2.
3
7
2
9
.
2
4
2
7
.
3
9
5
0
.
9
6
6
7
.
5
6
1
.
6
7
Ch
a
r
g
e
s
(
D
e
e
d
s
,
Ag
i
n
g
,
C
o
m
m
u
n
i
t
y
Pl
a
n
n
i
n
g
,
e
t
c
.
)
69
.
0
5
1
7
0
.
1
0
1
4
7
.
9
0
1
3
3
.
1
7
9
2
.
4
4
6
9
.
0
4
Sp
e
c
i
a
l
R
e
v
e
n
u
e
F
u
n
d
s
2
6
5
.
7
2
4
1
.
3
5
To
t
a
l
P
a
y
m
e
n
t
s
9,
5
0
9
.
8
4
6
,
2
9
5
.
8
7
9
,
5
9
1
.
7
6
1
3
,
2
1
2
.
0
8
8
,
2
6
7
.
2
9
7
,
8
3
4
.
2
8
To
t
a
l
P
a
y
m
e
n
t
s
(
N
o
F
+
S
t
a
x
e
s
)
2,
1
1
7
.
5
9
3
,
0
8
7
.
7
6
3
,
3
3
5
.
8
3
3
,
3
5
1
.
2
8
3
,
0
6
4
.
7
7
1
,
8
7
4
.
1
9
To
t
a
l
P
a
y
m
e
n
t
s
(p
c
t
.
o
f
i
n
c
o
m
e
)
2
6
.
1
4
2
1
.
6
1
3
9
.
0
4
3
4
.
8
3
2
2
.
2
6
2
1
.
6
4
To
t
a
l
P
a
y
m
e
n
t
s
N
o
F
+
S
(p
c
t
.
o
f
i
n
c
o
m
e
)
5
.
8
2
1
0
.
6
0
1
3
.
5
8
8
.
8
4
8
.
2
5
5
.
1
8
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
23
Re
s
u
l
t
s
(S
e
r
v
i
c
e
s
r
e
c
e
i
v
e
d
b
y
ci
t
i
z
e
n
s
p
e
r
c
a
p
i
t
a
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
O
C
M
e
b
a
n
e
H
i
l
l
s
b
o
r
o
u
g
h
C
h
a
p
e
l
Hi
l
l
C
a
r
r
b
o
r
o
U
n
i
n
c
o
r
p
Fe
d
e
r
a
l
3,
0
3
0
3
,
0
3
0
3,
0
3
0
3,
0
3
0
3,0303,030
St
a
t
e
2,
1
4
4
2
,
1
4
4
2,
1
4
4
2,
1
4
4
2,1442,144
F+
S
G
r
a
n
t
s
14
8
.
1
9
2
9
0
.
2
5
38
6
.
9
8
40
6
.
4
9
251.09148.19
Co
m
m
u
n
i
t
y
S
e
r
v
i
c
e
s
29
.
3
5
3
2
5
.
1
2
39
4
.
3
5
47
5
.
8
2
29.3529.35
Pa
r
k
s
&
R
e
c
23
.
4
4
1
3
9
.
6
1
23
.
4
4
13
9
.
5
2
103.7023.44
ED
/
T
o
u
r
i
s
m
5.
3
6
1
2
1
.
5
3
65
.
4
8
80
.
5
8
17.6917.86
Pl
a
n
n
i
n
g
/
I
n
s
p
e
c
t
i
o
n
s
24
.
6
7
2
4
.
6
7
92
.
8
1
78
.
1
5
96.5024.67
Ge
n
e
r
a
l
G
o
v
e
r
n
m
e
n
t
7.
4
8
3
1
6
.
4
9
12
4
.
9
8
17
0
.
9
2
327.097.48
El
e
c
t
i
o
n
s
4.
7
0
4.
7
0
4.
7
0
4.
7
0
4.704.70
Co
u
n
t
y
A
t
t
y
'
s
O
f
f
i
c
e
3.
9
1
3.
9
1
3.
9
1
3.
9
1
3.913.91
Co
u
n
t
y
M
a
n
a
g
e
r
4.
0
7
4.
0
7
4.
0
7
26
.
0
6
23.214.07
De
e
d
s
/
t
o
w
n
c
l
e
r
k
6.
4
2
6.
4
2
6.
4
2
6.
4
2
12.986.42
Ta
x
a
d
m
i
n
23
.
1
6
2
3
.
1
6
23
.
1
6
23
.
1
6
75.5523.16
Pu
b
l
i
c
S
a
f
e
t
y
2.
9
9
4
3
1
.
8
9
2.
9
9
2.
9
9
2.992.99
Em
e
r
g
e
n
c
y
s
e
r
v
i
c
e
s
62
.
0
0
6
2
.
0
0
23
4
.
4
8
20
8
.
6
7
204.2462.00
Sh
e
r
i
f
f
/
P
o
l
i
c
e
84
.
4
4
4
5
.
4
3
45
6
.
2
3
24
9
.
9
1
239.36162.53
Hu
m
a
n
S
e
r
v
i
c
e
s
19
.
2
7
1
9
.
2
7
19
.
2
7
19
.
2
7
19.2719.27
De
p
t
o
f
S
o
c
i
a
l
S
e
r
v
i
c
e
s
15
3
.
2
2
1
5
3
.
2
2
15
3
.
2
2
15
3
.
2
2
153.22153.22
Ag
i
n
g
14
.
8
8
0
.
0
0
15
.
1
0
15
.
1
0
15.1015.10
He
a
l
t
h
D
e
p
a
r
t
m
e
n
t
56
.
6
8
5
6
.
6
8
56
.
6
8
56
.
6
8
56.6856.68
Ho
u
s
i
n
g
1.
5
9
2.
6
0
2.
6
0
43
.
3
0
2.600.54
Li
b
r
a
r
y
S
e
r
v
i
c
e
s
14
.
1
9
1
4
.
1
9
14
.
1
9
62
.
4
3
14.1914.19
Li
b
r
a
r
y
M
u
n
i
c
i
p
a
l
4.
0
6
4.
0
6
4.
0
6
12
.
9
7
4.064.06
OP
C
A
r
e
a
P
r
o
g
r
a
m
9.
6
8
9.
6
8
9.
6
8
9.
6
8
9.689.68
Ed
u
c
a
t
i
o
n
54
8
.
3
5
5
4
8
.
3
5
54
8
.
3
5
54
8
.
3
5
548.35548.35
Su
p
p
o
r
t
S
e
r
v
i
c
e
s
50
.
1
8
5
0
.
1
8
54
.
2
2
50
.
1
8
119.2750.18
As
s
e
t
M
a
n
a
g
e
m
e
n
t
28
.
4
6
2
8
.
4
6
28
.
4
6
28
.
4
6
28.4628.46
Hu
m
a
n
R
e
s
o
u
r
c
e
s
5.
7
9
5.
7
9
15
.
4
0
30
.
3
1
36.175.79
De
b
t
S
e
r
v
i
c
e
19
4
.
7
4
2
7
3
.
6
6
31
5
.
4
9
30
1
.
1
4
249.44194.74
To
t
a
l
B
e
n
e
f
i
t
s
6,
7
0
5
8
,
1
3
9
8,
2
3
5
8,
3
8
2
7,8236,795
To
t
a
l
B
e
n
e
f
i
t
s
n
o
F
+
S
1,
5
3
1
2
,
9
6
5
3,
0
6
1
3,
2
0
8
2,6491,621
To
t
a
l
B
e
n
e
f
i
t
s
(
p
c
t
.
o
f
i
n
c
o
m
e
)
18
.
4
3
2
7
.
9
4
33
.
5
2
22
.
1
0
21.0518.77
To
t
a
l
B
e
n
e
f
i
t
s
n
o
F
+
S
(
p
c
t
.
o
f
i
n
c
o
m
e
)
4.
2
1
1
0
.
1
8
12
.
4
6
8.
4
6
7.134.48
Ne
t
S
u
m
m
a
t
i
o
n
-2
,
8
0
4
.
5
7
-
1
,
8
4
3
.
5
4
-1
,
3
5
7
.
0
3
-4
,
8
2
9
.
6
8
-
4
4
4
.
4
1
-
1
,
0
3
9
.
2
5
Ne
t
S
u
m
N
o
F
+
S
-5
8
6
.
3
2
-
1
2
2
.
3
5
-2
7
5
.
1
0
-1
4
2
.
8
8
-415.89-253.16
Ne
t
S
u
m
m
a
t
i
o
n
(
p
c
t
.
o
f
i
n
c
o
m
e
)
-7
.
7
1
-6
.
3
3
-5
.
5
2
-1
2
.
7
3
-1.20-2.87
Ne
t
S
u
m
m
a
t
i
o
n
N
o
F
+
S
(
p
c
t
.
o
f
i
n
c
o
m
e
)
-1
.
6
1
-
0
.
4
2
-1
.
1
2
-0
.
3
8
-1.12-0.7024
Re
s
u
l
t
s
•
Ca
n
w
e
k
n
o
w
h
o
w
m
u
c
h
c
i
t
i
z
e
n
s
a
r
e
p
a
y
i
n
g
f
o
r
e
a
c
h
i
n
d
i
v
i
d
u
a
l
s
e
r
v
i
c
e
re
l
a
t
i
v
e
t
o
w
h
a
t
t
h
e
y
a
r
e
g
e
t
t
i
n
g
f
r
o
m
e
a
c
h
i
n
d
i
v
i
d
u
a
l
s
e
r
v
i
c
e
?
•
No
,
N
o
t
r
e
a
l
l
y
.
•
Fo
r
e
x
a
m
p
l
e
,
c
i
t
i
z
e
n
s
o
f
t
o
w
n
A
a
r
e
p
a
y
i
n
g
$
5
0
f
o
r
t
h
e
l
i
b
r
a
r
y
a
n
d
g
e
t
t
i
n
g
$3
0
w
o
r
t
h
o
f
s
e
r
v
i
c
e
s
w
h
i
l
e
c
i
t
i
z
e
n
s
o
f
t
o
w
n
B
a
r
e
p
a
y
i
n
g
$
1
0
f
o
r
t
h
e
l
i
b
r
a
r
y
an
d
g
e
t
t
i
n
g
$
1
5
o
f
s
e
r
v
i
c
e
s
.
•
In
e
s
s
e
n
c
e
,
c
i
t
i
z
e
n
s
o
f
t
o
w
n
A
a
r
e
s
u
b
s
i
d
i
z
i
n
g
c
i
t
i
z
e
n
s
o
f
t
o
w
n
B
.
•
Ab
e
b
u
y
s
a
n
a
i
r
l
i
n
e
t
i
c
k
e
t
f
o
r
$
4
0
0
a
n
d
B
a
r
b
b
u
y
s
a
n
a
i
r
l
i
n
e
t
i
c
k
e
t
f
o
r
$
6
0
0
.
Bo
t
h
a
r
e
o
n
t
h
e
s
a
m
e
f
l
i
g
h
t
.
•
Wi
t
h
o
n
e
p
u
r
c
h
a
s
e
o
f
o
n
e
g
o
o
d
w
e
c
a
n
s
a
y
t
h
a
t
B
a
r
b
p
a
i
d
$
2
0
0
m
o
r
e
t
h
a
n
Ab
e
.
•
In
e
s
s
e
n
c
e
,
B
a
r
b
i
s
‘
s
u
b
s
i
d
i
z
i
n
g
’
A
b
e
’
s
t
r
i
p
.
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
25
Re
s
u
l
t
s
•
Bu
t
c
o
n
s
i
d
e
r
t
h
e
f
o
l
l
o
w
i
n
g
.
A
b
e
a
nd
B
a
r
b
d
o
n
’
t
b
u
y
i
n
d
i
v
i
d
u
a
l
a
i
r
l
i
n
e
ti
c
k
e
t
s
,
b
u
t
b
u
y
a
p
a
c
k
a
g
e
t
h
a
t
i
n
c
l
ud
e
s
a
i
r
f
a
r
e
,
h
o
t
e
l
,
f
o
o
d
,
d
r
i
n
k
s
,
an
d
a
c
t
i
v
i
t
i
e
s
.
•
Bo
t
h
A
b
e
a
n
d
B
a
r
b
p
a
y
$
2
,
0
0
0
f
o
r
th
e
v
a
c
a
t
i
o
n
p
a
c
k
a
g
e
.
W
h
o
su
b
s
i
d
i
e
s
w
h
o
?
•
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
•
26
Re
s
u
l
t
s
•
In
t
h
e
f
i
r
s
t
s
c
e
n
a
r
i
o
,
A
b
e
i
s
‘
s
u
b
s
i
di
z
i
n
g
’
B
a
r
b
’
s
h
o
t
e
l
w
h
i
l
e
B
a
r
b
i
s
‘s
u
b
s
i
d
i
z
i
n
g
’
A
b
e
’
s
a
i
r
f
a
r
e
•
In
t
h
e
s
e
c
o
n
d
s
c
e
n
a
r
i
o
,
A
b
e
i
s
‘
s
u
b
s
i
di
z
i
n
g
’
B
a
r
b
’
s
a
i
r
f
a
r
e
,
w
h
i
l
e
B
a
r
b
is
‘
s
u
b
s
i
d
i
z
i
n
g
’
A
b
e
’
s
h
o
t
e
l
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
27
Re
s
u
l
t
s
•
Th
e
s
a
m
e
t
h
i
n
g
a
p
p
l
i
e
s
i
n
O
r
a
n
g
e
C
o
u
n
t
y
•
Ig
n
o
r
i
n
g
c
h
a
r
g
e
s
a
n
d
s
p
e
c
i
f
i
c
t
a
x
e
s
,
f
o
r
t
h
e
m
o
s
t
p
a
r
t
t
a
x
p
a
y
e
r
s
a
r
e
p
a
y
i
n
g
in
t
o
a
g
e
n
e
r
a
l
f
u
n
d
w
h
i
c
h
i
s
s
p
e
n
t
o
n
m
a
n
y
d
i
f
f
e
r
e
n
t
s
e
r
v
i
c
e
s
.
•
Di
f
f
e
r
e
n
t
a
m
o
u
n
t
s
o
f
m
o
n
i
e
s
c
a
n
b
e
s
p
e
n
t
i
n
d
i
f
f
e
r
e
n
t
c
i
t
i
e
s
f
o
r
i
d
e
n
t
i
c
a
l
se
r
v
i
c
e
s
,
b
u
t
y
o
u
c
a
n
’
t
a
s
s
i
g
n
i
n
d
i
v
i
d
u
a
l
w
e
i
g
h
t
s
t
o
b
o
t
h
t
h
e
t
a
x
e
s
a
n
d
t
h
e
ex
p
e
n
d
i
t
u
r
e
s
.
•
Yo
u
c
a
n
o
n
l
y
d
e
t
e
r
m
i
n
e
t
h
e
s
u
m
m
a
t
i
o
n
o
f
t
h
e
v
a
l
u
e
o
f
a
l
l
s
e
r
v
i
c
e
s
r
e
l
a
t
i
v
e
to
t
h
e
t
o
t
a
l
t
a
x
s
i
n
c
e
c
i
t
i
z
e
n
s
r
e
c
e
i
v
e
o
n
e
t
a
x
b
i
l
l
n
o
t
a
s
e
p
a
r
a
t
e
t
a
x
b
i
l
l
f
o
r
ea
c
h
s
e
r
v
i
c
e
.
•
If
o
n
e
s
p
e
n
d
s
d
i
f
f
e
r
e
n
t
a
m
o
u
n
t
s
i
n
d
i
f
f
e
r
e
n
t
c
i
t
i
e
s
f
o
r
t
h
e
s
a
m
e
s
e
r
v
i
c
e
,
y
o
u
ar
e
a
p
r
i
o
r
i
ch
o
o
s
i
n
g
t
h
e
p
e
r
c
e
n
t
a
g
e
o
f
t
a
x
r
e
v
e
n
u
e
s
p
e
n
t
o
n
a
s
e
r
v
i
c
e
.
I
n
es
s
e
n
c
e
b
y
p
i
c
k
i
n
g
d
i
f
f
e
r
e
n
t
a
m
o
u
n
t
t
o
s
p
e
n
d
,
y
o
u
a
r
e
p
i
c
k
i
n
g
h
o
w
m
u
c
h
ci
t
i
z
e
n
s
p
a
y
f
o
r
t
h
a
t
s
e
r
v
i
c
e
.
•
Ci
t
i
z
e
n
s
o
f
t
o
w
n
A
a
n
d
B
p
a
y
a
t
a
x
b
il
l
o
f
$
5
0
0
.
T
o
w
n
A
s
p
e
n
d
s
$
3
0
o
n
t
h
e
li
b
r
a
r
y
w
h
i
l
e
t
o
w
n
B
s
p
e
n
d
s
$
1
5
o
n
t
h
e
l
i
b
r
a
r
y
.
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
28
Re
s
u
l
t
s
(S
e
r
v
i
c
e
s
r
e
c
e
i
v
e
d
b
y
ci
t
i
z
e
n
s
p
e
r
c
a
p
i
t
a
)
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
O
C
M
e
b
a
n
e
H
i
l
l
s
b
o
r
o
u
g
h
C
h
a
p
e
l
Hi
l
l
C
a
r
r
b
o
r
o
U
n
i
n
c
o
r
p
Fe
d
e
r
a
l
3,
0
3
0
3
,
0
3
0
3,
0
3
0
3,
0
3
0
3,0303,030
St
a
t
e
2,
1
4
4
2
,
1
4
4
2,
1
4
4
2,
1
4
4
2,1442,144
F+
S
G
r
a
n
t
s
14
8
.
1
9
2
9
0
.
2
5
38
6
.
9
8
40
6
.
4
9
251.09148.19
Co
m
m
u
n
i
t
y
S
e
r
v
i
c
e
s
29
.
3
5
3
2
5
.
1
2
39
4
.
3
5
47
5
.
8
2
29.3529.35
Pa
r
k
s
&
R
e
c
23
.
4
4
1
3
9
.
6
1
23
.
4
4
13
9
.
5
2
103.7023.44
ED
/
T
o
u
r
i
s
m
5.
3
6
1
2
1
.
5
3
65
.
4
8
80
.
5
8
17.6917.86
Pl
a
n
n
i
n
g
/
I
n
s
p
e
c
t
i
o
n
s
24
.
6
7
2
4
.
6
7
92
.
8
1
78
.
1
5
96.5024.67
Ge
n
e
r
a
l
G
o
v
e
r
n
m
e
n
t
7.
4
8
3
1
6
.
4
9
12
4
.
9
8
17
0
.
9
2
327.097.48
El
e
c
t
i
o
n
s
4.
7
0
4.
7
0
4.
7
0
4.
7
0
4.704.70
Co
u
n
t
y
A
t
t
y
'
s
O
f
f
i
c
e
3.
9
1
3.
9
1
3.
9
1
3.
9
1
3.913.91
Co
u
n
t
y
M
a
n
a
g
e
r
4.
0
7
4.
0
7
4.
0
7
26
.
0
6
23.214.07
De
e
d
s
/
t
o
w
n
c
l
e
r
k
6.
4
2
6.
4
2
6.
4
2
6.
4
2
12.986.42
Ta
x
a
d
m
i
n
23
.
1
6
2
3
.
1
6
23
.
1
6
23
.
1
6
75.5523.16
Pu
b
l
i
c
S
a
f
e
t
y
2.
9
9
4
3
1
.
8
9
2.
9
9
2.
9
9
2.992.99
Em
e
r
g
e
n
c
y
s
e
r
v
i
c
e
s
62
.
0
0
6
2
.
0
0
23
4
.
4
8
20
8
.
6
7
204.2462.00
Sh
e
r
i
f
f
/
P
o
l
i
c
e
84
.
4
4
4
5
.
4
3
45
6
.
2
3
24
9
.
9
1
239.36162.53
Hu
m
a
n
S
e
r
v
i
c
e
s
19
.
2
7
1
9
.
2
7
19
.
2
7
19
.
2
7
19.2719.27
De
p
t
o
f
S
o
c
i
a
l
S
e
r
v
i
c
e
s
15
3
.
2
2
1
5
3
.
2
2
15
3
.
2
2
15
3
.
2
2
153.22153.22
Ag
i
n
g
14
.
8
8
0
.
0
0
15
.
1
0
15
.
1
0
15.1015.10
He
a
l
t
h
D
e
p
a
r
t
m
e
n
t
56
.
6
8
5
6
.
6
8
56
.
6
8
56
.
6
8
56.6856.68
Ho
u
s
i
n
g
1.
5
9
2.
6
0
2.
6
0
43
.
3
0
2.600.54
Li
b
r
a
r
y
S
e
r
v
i
c
e
s
14
.
1
9
1
4
.
1
9
14
.
1
9
62
.
4
3
14.1914.19
Li
b
r
a
r
y
M
u
n
i
c
i
p
a
l
4.
0
6
4.
0
6
4.
0
6
12
.
9
7
4.064.06
OP
C
A
r
e
a
P
r
o
g
r
a
m
9.
6
8
9.
6
8
9.
6
8
9.
6
8
9.689.68
Ed
u
c
a
t
i
o
n
54
8
.
3
5
5
4
8
.
3
5
54
8
.
3
5
54
8
.
3
5
548.35548.35
Su
p
p
o
r
t
S
e
r
v
i
c
e
s
50
.
1
8
5
0
.
1
8
54
.
2
2
50
.
1
8
119.2750.18
As
s
e
t
M
a
n
a
g
e
m
e
n
t
28
.
4
6
2
8
.
4
6
28
.
4
6
28
.
4
6
28.4628.46
Hu
m
a
n
R
e
s
o
u
r
c
e
s
5.
7
9
5.
7
9
15
.
4
0
30
.
3
1
36.175.79
De
b
t
S
e
r
v
i
c
e
19
4
.
7
4
2
7
3
.
6
6
31
5
.
4
9
30
1
.
1
4
249.44194.74
To
t
a
l
B
e
n
e
f
i
t
s
6,
7
0
5
8
,
1
3
9
8,
2
3
5
8,
3
8
2
7,8236,795
To
t
a
l
B
e
n
e
f
i
t
s
n
o
F
+
S
1,
5
3
1
2
,
9
6
5
3,
0
6
1
3,
2
0
8
2,6491,621
To
t
a
l
B
e
n
e
f
i
t
s
(
p
c
t
.
o
f
i
n
c
o
m
e
)
18
.
4
3
2
7
.
9
4
33
.
5
2
22
.
1
0
21.0518.77
To
t
a
l
B
e
n
e
f
i
t
s
n
o
F
+
S
(
p
c
t
.
o
f
i
n
c
o
m
e
)
4.
2
1
1
0
.
1
8
12
.
4
6
8.
4
6
7.134.48
Ne
t
S
u
m
m
a
t
i
o
n
-2
,
8
0
4
.
5
7
-
1
,
8
4
3
.
5
4
-1
,
3
5
7
.
0
3
-4
,
8
2
9
.
6
8
-
4
4
4
.
4
1
-
1
,
0
3
9
.
2
5
Ne
t
S
u
m
N
o
F
+
S
-5
8
6
.
3
2
-
1
2
2
.
3
5
-2
7
5
.
1
0
-1
4
2
.
8
8
-415.89-253.16
Ne
t
S
u
m
m
a
t
i
o
n
(
p
c
t
.
o
f
i
n
c
o
m
e
)
-7
.
7
1
-6
.
3
3
-5
.
5
2
-1
2
.
7
3
-1.20-2.87
Ne
t
S
u
m
m
a
t
i
o
n
N
o
F
+
S
(
p
c
t
.
o
f
i
n
c
o
m
e
)
-1
.
6
1
-
0
.
4
2
-1
.
1
2
-0
.
3
8
-1.12-0.7029
Re
s
u
l
t
s
•
No
t
i
c
e
t
h
a
t
t
h
e
s
u
m
m
a
t
i
o
n
n
u
m
b
e
r
s
a
r
e
ne
g
a
t
i
v
e
.
Y
o
u
w
i
l
l
a
l
s
o
n
o
t
i
c
e
t
h
a
t
so
m
e
c
i
t
i
e
s
a
r
e
m
o
r
e
‘
n
e
g
a
t
i
v
e
’
t
h
a
n
ot
h
e
r
s
.
D
o
e
s
t
h
i
s
m
e
a
n
t
h
a
t
s
o
m
e
ci
t
i
e
s
a
r
e
s
u
b
s
i
d
i
z
i
n
g
o
t
h
e
r
s
?
•
No
t
n
e
c
e
s
s
a
r
i
l
y
.
•
Re
c
a
l
l
t
h
a
t
s
e
r
v
i
c
e
s
r
e
c
e
i
v
e
d
a
n
d
t
a
x
e
s
p
a
i
d
a
r
e
o
c
c
u
r
r
i
n
g
i
n
t
h
e
s
a
m
e
y
e
a
r
.
•
Al
l
o
f
t
h
e
c
i
t
y
a
n
d
c
o
u
n
t
y
g
o
v
e
r
n
m
e
n
t
s
a
r
e
m
o
v
i
n
g
c
u
r
r
e
n
t
t
a
x
y
e
a
r
r
e
c
e
i
p
t
s
in
t
o
‘
f
u
n
d
s
’
f
o
r
f
u
t
u
r
e
e
x
p
e
n
d
i
t
u
r
e
s
•
On
e
c
a
n
t
h
i
n
k
o
f
t
h
e
s
e
‘
f
u
n
d
s
’
a
s
s
a
v
i
n
g
s
a
c
c
o
u
n
t
s
—
h
e
n
c
e
t
h
e
‘
n
e
g
a
t
i
v
e
’
nu
m
b
e
r
s
•
Di
f
f
e
r
e
n
t
c
i
t
i
e
s
a
l
s
o
h
a
v
e
d
i
f
f
e
r
e
n
t
a
m
o
u
n
t
s
b
e
i
n
g
p
a
i
d
i
n
t
o
r
e
s
e
r
v
e
f
u
n
d
s
.
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
30
Re
s
u
l
t
s
•
So
m
e
c
o
u
n
t
y
l
e
v
e
l
p
r
o
g
r
a
m
s
a
r
e
l
e
s
s
e
v
e
n
l
y
d
i
s
t
r
i
b
u
t
e
d
t
h
a
n
o
t
h
e
r
s
.
F
o
r
ex
a
m
p
l
e
,
e
c
o
n
o
m
i
c
d
e
v
e
l
o
p
m
e
n
t
d
o
l
l
a
rs
a
r
e
m
o
r
e
c
o
n
c
e
n
t
r
a
t
e
d
i
n
t
h
e
ci
t
i
e
s
t
h
a
n
t
h
e
u
n
i
n
c
o
r
p
o
r
a
t
e
d
p
a
r
t
s
o
f
t
h
e
c
o
u
n
t
y
•
Bu
t
c
o
u
n
t
y
c
o
o
p
e
r
a
t
i
v
e
e
x
t
e
n
s
i
o
n
d
o
l
l
a
r
s
a
r
e
d
i
s
t
r
i
b
u
t
e
d
m
o
r
e
t
o
w
a
r
d
s
un
i
n
c
o
r
p
o
r
a
t
e
d
a
r
e
a
s
t
h
a
n
t
h
e
c
i
t
i
e
s
.
•
Ot
h
e
r
t
h
i
n
g
s
i
n
c
l
u
d
e
p
a
y
m
e
n
t
s
f
r
o
m
C
a
r
r
b
o
r
o
t
o
C
h
a
p
e
l
H
i
l
l
t
o
h
e
l
p
f
u
n
d
pu
b
l
i
c
t
r
a
n
s
i
t
.
•
Ot
h
e
r
p
r
o
g
r
a
m
s
h
a
v
e
s
l
i
g
h
t
v
a
r
i
a
t
i
o
n
s
i
n
t
h
e
m
d
e
p
e
n
d
i
n
g
u
p
o
n
w
h
e
r
e
t
h
e
se
r
v
i
c
e
i
s
l
o
c
a
t
e
d
.
•
Al
s
o
r
e
c
a
l
l
t
h
a
t
t
h
e
r
e
a
r
e
o
t
h
e
r
d
i
f
f
e
r
e
n
ce
s
s
u
c
h
a
s
d
i
f
f
e
r
e
n
c
e
s
i
n
p
r
o
p
e
r
t
y
ta
x
e
s
d
u
e
t
o
d
i
f
f
e
r
e
n
c
e
s
i
n
p
r
o
p
e
r
t
y
v
a
l
u
a
t
i
o
n
.
•
Al
l
o
f
t
h
e
s
e
f
a
c
t
o
r
s
c
o
m
b
i
n
e
t
o
m
a
k
e
t
h
e
s
e
s
m
a
l
l
d
i
f
f
e
r
e
n
c
e
s
i
n
t
h
e
p
e
r
ca
p
i
t
a
n
u
m
b
e
r
s
b
e
t
w
e
e
n
t
h
e
c
i
t
i
e
s
.
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
St
u
d
y
31
Re
s
u
l
t
s
•
It
d
o
e
s
n
o
t
a
p
p
e
a
r
t
h
o
u
g
h
t
h
a
t
t
h
e
r
e
is
a
c
o
n
c
e
r
t
e
d
e
f
f
o
r
t
a
t
t
h
e
c
o
u
n
t
y
le
v
e
l
t
o
s
u
b
s
i
d
i
z
e
o
n
e
p
a
r
t
o
f
t
h
e
c
o
u
n
t
y
o
v
e
r
t
h
e
o
t
h
e
r
•
Fi
n
a
l
l
y
,
r
e
c
a
l
l
t
h
a
t
t
h
e
s
e
n
u
m
b
e
r
s
a
r
e
a
‘s
n
a
p
s
h
o
t
’
.
I
f
t
a
x
d
o
l
l
a
r
s
a
r
e
b
e
i
n
g
sa
v
e
d
i
n
t
o
r
e
s
e
r
v
e
f
u
n
d
‘
X
’
t
h
a
t
w
o
u
l
d
m
o
s
t
l
y
b
e
n
e
f
i
t
t
o
w
n
‘
Z
’
,
t
h
e
n
t
o
d
a
y
i
t
mi
g
h
t
a
p
p
e
a
r
t
h
a
t
t
o
w
n
‘
Z
’
i
s
p
a
y
i
n
g
m
o
r
e
a
n
d
g
e
t
t
i
n
g
f
e
w
e
r
s
e
r
v
i
c
e
s
.
•
Bu
t
i
f
t
h
i
s
s
t
u
d
y
w
a
s
r
e
p
e
a
t
e
d
i
n
a
fe
w
y
e
a
r
s
f
r
o
m
n
o
w
w
h
e
n
t
h
e
r
e
s
e
r
v
e
d
fu
n
d
d
o
l
l
a
r
s
a
r
e
b
e
i
n
g
s
p
e
n
t
,
t
h
a
n
i
t
m
i
gh
t
a
p
p
e
a
r
t
h
a
t
t
o
w
n
‘
Z
’
i
s
p
a
y
i
n
g
le
s
s
a
n
d
g
e
t
t
i
n
g
m
o
r
e
s
e
r
v
i
c
e
s
.
•
No
t
i
c
e
t
h
a
t
w
h
a
t
e
v
e
r
i
n
e
q
u
i
t
y
e
x
i
s
t
s
a
t
t
h
e
j
u
r
i
s
d
i
c
t
i
o
n
l
e
v
e
l
i
s
d
r
i
v
e
n
la
r
g
e
l
y
b
y
i
n
e
q
u
i
t
y
i
n
t
h
e
f
e
d
e
r
a
l
t
a
x
s
y
s
t
e
m
a
n
d
n
o
t
t
h
e
l
o
c
a
l
t
a
x
s
y
s
t
e
m
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
St
u
d
y
32
Qu
e
s
t
i
o
n
s
•
T
h
a
n
k
y
o
u
f
o
r
y
o
u
r
t
i
m
e
.
Q
u
e
s
t
i
o
n
s
?
?
CC
M
E
c
o
n
o
m
i
c
s
,
L
L
C
O
C
T
a
x
E
q
u
i
t
y
S
t
u
d
y
33
Orange County Tax Equity Study
C.C.M. Economics, L.L.C.
August 2017
34
[THIS PAGE LEFT INTENTIONALLY BLANK FOR DUPLEX PRINTING]
35
CCM Economics, LLC Orange County Tax Equity Page i
Orange County Tax Equity Study
Table of Contents
Executive Summary.........................................................................................................................ii
1. Introduction..................................................................................................................................1
IIA. Area of Study (A-Orange County)...........................................................................................3
IIB. Area of Study (B-Cities within Orange County)....................................................................12
III. Tax Equity Study Outline........................................................................................................19
IV. Government Revenues and Expenditures................................................................................22
V. Conclusions...............................................................................................................................39
Appendix A....................................................................................................................................42
Appendix B....................................................................................................................................43
Appendix C....................................................................................................................................45
36
CCM Economics, LLC Orange County Tax Equity Page ii
Executive Summary
This report is an attempt to measure the equity in taxation and government spending for
citizens of Orange County and is based upon the Wicker Study from 1987. The Wicker Study
examined the different levels of municipal and county taxes that citizens of Mebane, Carrboro,
Hillsborough, and Chapel Hill paid relative to the levels of government provided benefits that
they received. Citizens of Orange County who did not reside in a municipality were also
examined. This report has updated and expanded upon the Wicker Study in an important way.
A large portion of local government funding comes from state and federal governments. This
fiscal federalism comes in many forms such as block and category grants. In essence, citizens
are sending tax dollars to their local governments via federal and state governments. By ignoring
state and federal government spending and taxation, one will get an inaccurate picture of local
government spending and taxation. Intrinsically, one would be counting all local government
spending as benefits while ignoring the taxes sent to local governments via the federalist taxation
system.
Budgets of local and county governments were examined in detail. This data was
combined with data from other data sources from the federal and state level to determine how
much, on a per capita basis, each citizen of the aforementioned municipalities is paying in taxes.
This was then compared to the level of government provided benefits that each citizen on a per
capita basis is receiving. Citizens of Orange County who do not live in a municipality were also
studied. An online survey of Orange County citizens was also employed to understand which
government provided goods and services are being utilized and by whom.
Results indicate that on a per capita dollar basis, Orange County citizens are facing a
slightly negative amount on net when it comes to comparing taxes paid to benefits received.
However, there are two important caveats to this result. The first is that local municipal and
county governments shift some of today’s tax revenues into reserve funds to pay for future
expenditures. Due to the ‘snapshot’ methodology employed in this study, this would appear as
‘taxes’ being larger than ‘expenditures’—i.e, that there is a negative amount of net benefits
received by Orange County Citizens. However, the shifting of current tax revenues into reserve
funds is analogous to the way that a household shifts current income into a savings account to
pay for future consumption. The second caveat is that the majority of Orange County citizens’
tax inequity comes from federal government spending and taxation patterns. For example,
Chapel Hill citizens on a per capita basis pay almost $8,000 in federal taxes but receive only
$3,000 in benefits from federal government spending. In short, if Orange County citizens desire
to see a more equitable distribution of taxation and government spending, they should focus
more on the policies of the federal government rather than state or local governments.
37
CCM Economics, LLC Orange County Tax Equity Page 1
I. Introduction
The question of tax equity has been a topic of particular importance lately. One often
hears in the popular press, professional peer-reviewed journals, and in national, state, and local
elections the question of who is ‘paying their fair share’. For example, according to data from
the Internal Revenue Service and the Congressional Budget Office, the top 1% of all federal
income taxpayers in the United States made 20.6% of all adjusted gross income (AGI) in the
country in 2014. However, these top 1% taxpayers paid 39.5% of all income taxes. Similarly,
the top 25% of all federal income taxpayers made 69% of all adjusted gross income but paid
87% of all federal income taxes collected. The bottom 50% of taxpayers made just 11.3% of all
adjusted gross income but paid 2.8% of all federal income taxes.1,2
When one considers other sources of federal taxation and income transfers, these tax
share numbers can change significantly depending upon the metric that one uses. For example,
the Federal Insurance Contribution Allowance, commonly known as FICA which funds
programs such as Social Security, is a flat tax of 6.20% on wage income up to $127,000 in 2017.
This means that two different workers, one who earns $127,000 in wages and one who earns
$227,000 in wages will pay the same amount of tax, $7,874, to the Social Security
Administration. However, as a percentage of income, the lower paid worker faces a larger
burden from the tax. He will have paid 6.20% of his wage income in FICA taxes, while the
higher paid worker will have paid 3.47% of his wage income in FICA taxes.
Nevertheless, high income households tend to receive a very small percentage of any
income transfers programs such as food stamps or Aid to Families with Dependent Children
(AFDC commonly known as welfare). Furthermore, due to the progressive nature of many
1 IRS Statistics of Income, available at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-tax-rate-
and-income-percentile
2 Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2013”, available at
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51361-householdincomefedtaxes.pdf
38
CCM Economics, LLC Orange County Tax Equity Page 2
income transfer programs such as social security, high income households receive a smaller
payout as measured by before retirement replacement income than do low income households.
Therefore, it’s possible to show that high income households receive fewer ‘benefits’ from
government spending than other households might.
In short, there is no easy way to measure tax equity. Returning to the previous example
of federal AGI and taxes, one can easily argue that the top 1% of AGI earners need to pay a
disproportionate large share of income taxes since they are earning a very large percentage of the
adjusted gross income. One can just as easily argue that the top 1% is paying too much in tax
since the top 1% are responsible for twice as much federal income tax as they earn in adjusted
gross income.
In the 1980’s, the county of Orange County, North Carolina commissioned a study by
Wicker that examined the issue of tax equity within Orange County.3 Essentially, the Wicker
study estimated how much people are paying in taxes relative to the amount of government
services that they receive. The Wicker study examined the spatial source of various county
revenues and well as the spatial recipients of different county services. In short, the study
concluded that citizens of the unincorporated areas of Orange County paid less per capita in
terms of taxes and received less in terms of benefits then of cities such as Chapel Hill which paid
more in taxes and received more in benefits. It was estimated that citizens in the unincorporated
areas paid $488 in taxes per capita and received $419 in benefits for a net negative outlay of
almost $69. At the same time, citizens of Chapel Hill paid $855 in taxes per capita and received
$946 in government services per capita for a net positive outlay of $90. This report seeks to
update these numbers and use a different methodology to measure benefits and costs.
3 Wicker, “Tax Equity in the Financing of Local Government in Orange County, 1987-1988”, Published Report,
1989.
39
CCM Economics, LLC Orange County Tax Equity Page 3
II. Area of Study
A. Orange County
Orange County is located in the upper middle portion of the state of North Carolina and is
approximately 401 square miles in size. Its location within the State of North Carolina is
highlighted in orange in Figure 1. Orange County is part of the 4 county Durham-Chapel Hill
Metropolitan Statistical Area. The Durham-Chapel Hill MSA had a population of 551,237 in
2015 and is part of the greater 11 county Raleigh-Durham Combined Statistical Area which had
a population of 1,271,381 in 2015. Figure 2 offers a zoomed in view of Orange County along
with the different cities contained within Orange County and the surrounding counties.
Figure 1. Location of Orange County within the State of North Carolina
40
CCM Economics, LLC Orange County Tax Equity Page 4
Figure 2. Orange County, Surrounding Counties, and Municipalities
Contained within Orange County are several municipalities, three of which cross the
county line as shown in Figure 3. The city of Mebane, lies partially in Orange County, but the
majority of the city lies in Alamance county. The city of Mebane is 8.898 square miles in area of
which 22.03%, or 1.961 square miles, is in Orange County. At the same time, the municipality
of Chapel Hill has an area of 21.199 square miles of which 92.37% or 19.582 square miles lies in
Orange County. Finally, the town of Durham protrudes ever so slightly into Orange County.
41
CCM Economics, LLC Orange County Tax Equity Page 5
The town of Durham is 109.982 square miles in size of which 0.20 square miles resides in
Orange County. This means that 0.18% of the town of Durham is within Orange County. Since
such a small portion of the town of Durham is in Orange County, the contribution of taxes and
benefits received by these few residents is ignored for this analysis. The remaining
municipalities in Orange County are Hillsborough, which is the county seat, and Carrboro.
Figure 3. County, Municipal, and Zip Code Boundaries
42
CCM Economics, LLC Orange County Tax Equity Page 6
In 1987, which was the year of the Wicker Study, the county population stood at 86,236
whereas today it has grown to 140,144. This is a growth of 62.5% over the interim time period.
If one was to examine the compound average annual growth rate (CAGR) over this time period,
it would equal 1.74%.4 However, not all parts of Orange County have grown at the same rate.
Table 1 and Figure 4 compare how population has changed for the different cities in Orange
County as well as the MSA, the state of North Carolina, and the USA. Since Mebane and
Chapel Hill have a nontrivial amount of population outside of the county, the municipal-wide
population, as well as the municipal population contained only within Orange County is included
as well.
Table 1. Population Changes, 1987-2015
Location 1987 2015
Percent
Change CAGR
Carrboro 11,375 20,558 180.7 2.1
Chapel Hill Town 36,711 59,569 162.3 1.7
Chapel Hill--OC Only 37,205 56,459 151.8 1.5
Hillsborough 3,343 6,464 193.4 2.4
Mebane City 4,048 12,623 311.8 4.1
Mebane--OC only 517 1,995 385.9 4.9
Unincorporated 33,796 54,606 161.6 1.7
Orange County 86,236 140,144 162.5 1.7
Durham-Chapel Hill MSA 325,762 551,237 169.2 1.9
North Carolina (mil) 6.404 10.04 156.8 1.6
USA (mil) 242.3 321.4 132.6 1.0
4 The compound annual growth rate is determined by the following formula: {[(Ending value / Beginning
value)]^(1/# of years)] -1}. It represents the rate of increase or decrease necessary to get one from the initial value
to the ending value. For example, suppose that population in county X goes fro m 100 to 175 over a 10 year period.
Population in county X has grown by 75% over this 10 year period, but has experienced an average growth rate of
5.75% since there is the opportunity for compounding over the time period. If one used a growth rate of 7.5% per
year for 10 years, population in county X would grow from 100 to 206 .
43
CCM Economics, LLC Orange County Tax Equity Page 7
Figure 4. Population Changes, 1987-2015
There is also a wide distribution of income between the different municipalities of
Orange County. Table 2 denotes these per capita income values and illustrates the disparity in
income within the county.5 Currently per capita income in the US is $28,930, it is $25,920 in
North Carolina, and it is $56,459 in Chapel Hill. Now consider the case of Carrboro which has a
per capita income of $20,558. Columns 3, 4, and 5 show how Carrboro’s per capita income
relates as a percentage to the US, NC, and Chapel Hill per capita income.6 In the first row we
see that Carrboro’s per capita income is 71% of the nation’s per capita income and is only 36%
as much as Chapel Hill’s per capita income. Similarly, Chapel Hill’s per capita income is almost
twice as much as per capita income in the nation, and is more than twice as large as per capita
income in the state of North Carolina.
5 United States Census Bureau, www.census.gov
6 Chapel Hill’s per capita income was chosen as a metric since it is the largest in the county. One could, of course,
select any of the other areas as a basis of comparison.
0 50 100 150 200 250 300 350 400
Carrboro
Chapel Hill City
Chapel Hill--OC Only
Hillsborough
Mebane City
Mebane--OC only
Unincorporated
Orange County
Durham-Chapel Hill MSA
North Carolina (mil)
USA (mil)
44
CCM Economics, LLC Orange County Tax Equity Page 8
Table 2. Per Capita Income Distributions
Per Capita
Income
Percent of
USA
Percent of
NC
Percent of
Chapel Hill
Carrboro 20,558 71.06 79.31 36.41
Chapel Hill 56,459 195.16 217.82 100.00
Hillsborough 24,567 84.92 94.78 43.51
Mebane 29,134 100.71 112.40 51.60
Unincorporated 36,196 125.12 139.65 64.11
Orange County 36,380 125.75 140.35 64.44
North Carolina 25,920 89.60 100.00 45.91
USA 28,930 100.00 111.61 51.24
Discussion about the distribution of income within the county is important due to the
current structure of the tax code and the way the tax revenues are distributed. Currently, about
61% of Orange County’s population lives within a municipality. This means that citizen will be
subjected to a variety of different and interrelated taxes from different taxing jurisdictions. In the
United States, all governments (federal, state, and local) collected $5.319 trillion in taxes and
spent $6.177 trillion in 2016. This means that all governments collected $16,412 and spent
$19,057 on a per capita basis. These taxes are used to pay for a variety of federal, state, and
local government services such as national defense, roads, police and fire protection, libraries,
highways, office space, paper and pencils, etc. However, not all of the $5.319 trillion in taxes is
used to provide goods and services. Some of the tax dollars are used to pay interest on
government borrowing at all levels of government. Furthermore, a significant portion of taxes
collected are redistributed between people and governments.7
Returning to the example of all government spending, of the $6.177 trillion spent by
governments, only $2.6552 trillion was actually spent by the government to purchase goods and
services such as national defense, roads, police and fire protection, etc. The remaining amount is
transfer payments for programs such as AFDC, social security, unemployment insurance, grants
7 See Appendix A for more clarity.
45
CCM Economics, LLC Orange County Tax Equity Page 9
to different governments, etc. Table 3 shows the sources of spending and receipts by federal and
state/local governments and displays some interesting mechanisms of fiscal federalism.8 Note
that approximately 30% of state and local government receipts are from grants from the federal
government to the various subnational governments. We also see that state and local
governments actually account for 63% of government expenditures on goods and services, while
the federal government accounts for 73% of transfer payments to persons and households.
Additionally, one should note that of the $978.1 in government expenditures for goods and
services made by the federal government, $732.2 billion is for national defense. Therefore, state
and local governments account for 87% of non-defense related government expenditures for
goods and services. In short, most government expenditures occur and the state and local level
and most transfer payments occur at the federal level. Because of the structure of the current
progressive tax code and the fiscal federalism system, there will always be some
states/counties/cities/households that will pay ‘more’ in taxes than they ‘receive’ in benefits.
Table 3. Government Receipts and Spending, 2016 ($ bn)
All Govt Federal State/Local
Government Receipts (all sources) 5,319.6 3,497.8 2,372.9
Taxes 3,744.3 2,153.6 1,590.8
Social Insurance Taxes 1,251.9 1,232.6 19.3
Current Transfer Receipts from others/govts 214.2 73.4 691.9
Income from assets 131.6 49.2 82.4
Expenditures for goods/services 2,655.2 978.1 1677.1
Transfer Payments to persons 2,796.3 2,047.9 695.2
Transfer Payments to other govt 604.4
Interest 666.3 474.1 192.3
Subsidies 59.2 58.7 0.5
8 Bureau of Economic Analysis, NIPA Accounts. www.bea.gov. Please note that not all columns and rows add up
due to rounding and the nature of fiscal federalism.
46
CCM Economics, LLC Orange County Tax Equity Page 10
An examination of the Orange County budget helps to illustrate the complexity of the tax
equity issue. The county collected $202.832 million in revenue from an assortment of taxes,
licensing fees, service charges, interest on earnings, and intergovernmental grants. The county
received $20.7 million in intergovernmental grants for different functions such as social services,
transportation, enforcement of child support, etc. Taxes were on a variety of different things
including property, motor vehicles, and retail sales just to name a few. In the 2015 fiscal year,
these taxes totaled $166.1 million while licensing fees brought in $331,510—only 0.16% of total
Orange County revenue. Figure 5 presents Orange County government revenues by category.
As one can clearly see, the majority of tax revenue, 92%, for the county comes from property
and sales taxes and intergovernmental grants from higher level governments such as the federal
government and the state of North Carolina. Of course, tax money from the federal and state
governments that gets shifted to local governments comes primarily from income and sales
taxes.9 In essence, Orange County citizens are paying federal and state income taxes of which a
portion of these tax revenues are then shifted down to the county government level as if there
had been a ‘county level income tax’.
9 Approximately 87% of the state of North Carolina’s tax revenue is from income and sales taxes .
47
CCM Economics, LLC Orange County Tax Equity Page 11
Figure 5. Orange County Government Revenues, 2015 FY
Orange County spends its revenues of a variety of functions. These include education,
public safety, human and community services, etc. In fiscal year 2015, Orange County spent
$201.596 million. Some of these expenditures are for county wide services while others might
be more locally targeted. Figure 6 breaks out the different categories of spending. The largest
expenditure for the county is education spending which is almost 4 out of every 10 dollars.
These education expenditures are for county schools (which are different from municipal
schools) and for the Orange Campus of Durham Tech. This is followed by human services and
public safety. Human services includes, but is not limited to, programs such as child support,
social services, libraries, and the county health department. Public safety is focused on
emergency services and the sheriff’s office. Spending by municipalities on their police force
would not be included here. About 9% of government spending is to provide general
government and support services such as registering deeds, ensuring elections, and administering
Charges for services
5%
Intergovernmental
10%
Transfers from other
funds
1%
Property Taxes
72%
Sales Tax
10%
Licenses, Permits,
Investments
0%
Miscellaneous
2%
48
CCM Economics, LLC Orange County Tax Equity Page 12
taxes. Included in this 9% amount are monies spent to actually run government such as human
resources and information technologies.
Figure 6. Orange County Government Expenditures, 2015 FY
B. Cities within Orange County
As stated earlier, there are 4 principal municipalities within Orange County. Like the
county itself, they receive their revenue from a variety of sources including sales and property
taxes, permits and fees, and intergovernmental transfers. One of these intergovernmental
transfers are Powell Fund Allocations which are based upon gasoline taxes collected at the state
level and reallocated to the municipalities for streets based upon their population and street
mileage. Figures 7 through 10 outline the principal sources of revenues for the cities. The
percentage of general government fund revenue that derives from the summation of
intergovernmental transfers, property taxes, and sales taxes is grouped tightly between the four
Community Services
6%
General Government
3%
Public Safety
10%
Human Services
19%
Education
38%
Support Services
6%
Debt Service
14%
Transfers to Funds
4%
49
CCM Economics, LLC Orange County Tax Equity Page 13
cities. Mebane has the lowest percentage of total government revenues deriving from these three
principal sources at 75% and Hillsborough has the highest at 84%. Chapel Hill and Carrboro are
at 82% and 80% respectively.
Chapel Hill has a variety of dedicated funds that are outlined in Figure 11. These
include dedicated funds that are outside general government funds. For example, the town of
Chapel Hill provides transit services for the town of Carrboro, the University of North Carolina,
and the town of Chapel Hill. These services are funded from a variety of different sources
including federal and state grants, contributions from the towns of Carrboro and UNC, and
transit fares. The town of Chapel Hill contributes approximately 19% to the total transit funding,
with the town of Carrboro and UNC contributing 6% and 32% respectively, and federal and state
assistance at 19%. Furthermore, Hillsborough and Mebane have dedicated water and sewer
funds. In fiscal year 2015, this fund collected $10.391 million in revenue and had expenditures
of $9.907 million for the town of Hillsborough. These funds are collected from selling water and
sewer service to the residents and businesses of Hillsborough and some residents and businesses
a little outside of the town. Mebane collected $7.432 million and had expenditures of $5.528
million. Carrboro also has dedicated funds for special revenues that finance projects such as
affordable housing and energy efficiency and a capital project fund that is used for capital
expenditures such as new fire trucks, storm water management, and sidewalks.
50
CCM Economics, LLC Orange County Tax Equity Page 14
Figure 7. City of Mebane Government Revenues, 2016 FY
Figure 8. Town of Hillsborough General Fund Government Revenues, 2015 FY
Property tax (all)
54%
SalesTax
17%
Utility Franchise Tax
4%
Fire District Tax
3%
Powell Bill
2%
Sanitation Fees
2%
Permits
2%
Transfers
2%
Fund
Balance
Transfers
9%
Other
5%
Property Tax
68%
Sales Tax
14%
Licenses and
Permits
2%
Intergovernmental
2%
Investment
earnings
0%
Fund Balance
Transfers
7%
Other
3%
Debt Issuance
4%
51
CCM Economics, LLC Orange County Tax Equity Page 15
Figure 9. Town of Carrboro Government Revenues, 2015 FY
Figure 10. Town of Chapel Hill, General Fund Government Revenues, FY 2015
Property Tax
57%
Sales Tax
16%
Other Taxes
3%
Intergovernmental
7%
Fees and Permits
6%
Service
Charges
1%
Fund Balance
Transfers
5%
Other Revenue
1%
Other Financing
Sources
4%
Property Tax
48%
Sales Tax
20%
Other Taxes
2%
Intergovernmental
14%
Other
1%
Service Charges
7%
Licenses and
Permits
4%
Transfers
4%
52
CCM Economics, LLC Orange County Tax Equity Page 16
Figure 11. Town of Chapel Hill, Government Revenues from all Funds, FY 2016
The four towns of Orange County have a similar nature in their primary expenditures.
These include expenditures for government functions such as police and fire protection, planning
and building inspections, economic development, and parks. As is typical of cities, the largest
percentage of its expenditures are on public safety and general government administration. The
town of Hillsborough expends 53%, Mebane 58%, and Chapel Hill 60% of its general revenue
funds on these categories while the town of Carrboro is somewhat of an outlier and only spends
one-third of its revenue on them. All of the municipalities also devote significant resources to
economic development, public works, and parks. One can see the principal expenditure
categories by municipality from figures 12 through 15. Other categories of municipal spending
that are not consistent across municipalities are special funds for developments like transit
spending and affordable housing. These are accounted for separately from general fund revenues
and expenditures.
General Funds
60%
Transit
21%
Stormwater
2%
Parking
2%
Housing
2%
Capital Projects
1%Other
5%Debt
Service
7%
53
CCM Economics, LLC Orange County Tax Equity Page 17
Figure 12. Town of Hillsborough Expenditures, FY 2015
Figure 13. Town of Carrboro Expenditures, FY 2015
Admin
9%
Planning
5%
Safety & Wellness
1%Public
Space
4%Information
Services
0%
Police
31%
Fire
13%
Fleet Maintenance
3%
Streets
11%
Powell Bill
3%
Solid Waste
11%
Cemetery
0%
Economic
Development
5%
Other
4%
Admin
9%
Economic
Development
4%
Information
Technology
5%
Police
12%
Fire
11%
Planning
6%
Transportation
5%
Public Works
32%
Parks
8%
Debt Service
5%
Other
3%
54
CCM Economics, LLC Orange County Tax Equity Page 18
Figure 14. Town of Chapel Hill Expenditures, FY 2015
Figure 15. City of Mebane Expenditures, FY 2015
Police
24%
Admin
21%
Fire
15%
Parks
11%
Library
5%
Environment
24%
Police
19%
Fire
15%
Admin
24%
Public Works
23%
Planning
4%
Economic
Development
6%Parks
9%
55
CCM Economics, LLC Orange County Tax Equity Page 19
III. Tax Equity Study Outline
When discussing equity, it is important to be sure to define one’s terms. As alluded to in
section I, defining equity is inherently dependent upon one’s values and is therefore a normative
issue. There are two broad ways though that equity vis-à-vis government spending and taxation
is examined. The first is the ability to pay principle which states that households that have a
larger ability to pay (i.e. high income) should pay a larger amount of taxes irrespective of the
level of benefits that they receive in exchange. The second way is the benefits principle which
states that households should pay taxes commensurate with the level of benefits that they
receive.10
Residents of Orange County were divided up into 5 different geographic subgroups
depending upon where they lived. These different groups are Chapel Hill, Mebane, Carrboro,
Hillsborough, and Unincorporated which are citizens who reside in Orange County but not in a
municipality. Furthermore, citizens of Chapel Hill and Mebane were further subdivided into
citizens who reside in Orange County and those who resided outside of the county. The total
amount of taxes paid from each of these 5 different areas was determined using data from
various sources such as Orange County internal reports, municipal budgets, Census Bureau,
North Carolina Department of Finance, etc. From here, one can easily calculate the amount of
taxes paid per capita by dividing the total amount of tax from a jurisdiction and dividing by the
population of that district. It should be noted that this does not mean that every citizen of that
10 Let us illustrate these two principles. Consider an example of a country with only two persons, one who
earns $100,000 and one who earns $25,000, and only one government p rovided good—a park that costs $10,000 a
year to maintain. According to the ability to pay principle, the government should charge the high wage earner a
higher amount of taxes. We can assess an income tax rate of 9% on the high wage earner and 4% on the low wage
earner. Under these rates, the high wage earner pays $9,000 in taxes and the low wage earner pays $1,000 so that
the government can fund the yearly cost of the park. These rates are set irrespective of who actually uses the park.
The benefit principle says whoever uses the park should pay for the park. Therefore, if both the high and low wage
earner use the park in equal amounts, they should each pay $5,000 in taxes. This report states, to a degree, both of
these methods and leaves it to the reader to assess which is the preferable method for distributing the assessment of
taxation and government provided goods and services.
56
CCM Economics, LLC Orange County Tax Equity Page 20
jurisdiction pays that amount of tax—it is an average amount paid by each citizen of that
jurisdiction. For example, there is a tax on beer and wine that collected $259,654 dollars in the
2015 fiscal year for Orange County. Since the county population is 140,144, this means on
average each citizen paid $1.85 in beer and wine tax. Of course, if a citizen did not purchase any
wine or beer, then they would not have paid the tax.
Furthermore, it was necessary to examine each revenue and expenditure amount in detail
to assign it to the proper locality. For example, the Chapel Hill transit system collected revenue
of $19.322 million in the 2016 fiscal year. If one was to simply divide this amount by the
number of residents, it would appear that Chapel Hill residents paid $324.37 per capita for transit
service. However, closer examination of the revenues shows that large portions of the revenue
comes from sources outside Chapel Hill. For example, the Chapel Hill transit system also
received $3.3 million in state and federal grants, $1.540 million from the town of Carrboro, and
$7.919 million from UNC.11 In short, approximately $12.8 million of transit system revenues are
from outside sources.12
Determining benefits received consisted of several different activities. The budgets were
examined to determine where certain monies were spent and on which localities. A second
method of determining benefits used was an online survey. Postcards were mailed to 1,000
randomly selected addresses with a link to the survey. Furthermore, the link was distributed to
residents via email, facebook, and other methods. A total of 478 responses were received.
Benefits and taxes were then compared on a per capita basis by location. This was easier
for some taxes and benefits than for others. For example, the county has excellent records on
11 UNC is of course funded to a large degree by federal and state tax dollars and grants.
12 Since a large portion of tax dollars paid to federal and state government is returned to counties and cities, it helps
to know the value of taxes paid to federal and state governments. Without this accounting, it would appear that local
government provided good and services are cheaper than they actually are which is a shortcoming of the 1989
Wicker study.
57
CCM Economics, LLC Orange County Tax Equity Page 21
who is assessed for property taxes on real property within county lines. It is therefore somewhat
straight forward to determine the amount of property taxes paid by citizens of a particular
municipality. Other components were harder to determine. For example, currently the county
funds several parks. These parks are not restricted to citizens of Orange County but are available
to everyone. Furthermore, some of the parks are easier to access for some citizens than for
others. If a park is located in the northwest corner of the county, there is no legal restriction on
citizens from the southeast corner of the county from using the park. It is though, ceteris paribus,
more difficult for the citizen in the southeast corner to use the park than it would be for a citizen
in the northwest corner of the county.
This study though is primarily focused on not who uses county and municipally provided
services, but if they are available to all citizens who are funding that particular service.13
Returning to the illustration of the park in the previous paragraph, if the park is funded by a
county wide tax that is paid by all citizens and is available for all citizens to use, then one could
say that this is ‘equitable’. If, however, the tax to fund the park was assessed on all Orange
County citizens but the park facilities were only allowed to be used by the citizens of
Hillsborough, then one could say that this is ‘unequitable’. The only way that having an Orange
County government provided good or service for certain citizens of the county could be
‘equitable’ was if onl y those citizens who paid the special assessment for the service were
allowed to use the service. In this example, if the citizens of Hillsborough paid a special Orange
County government assessment for a park, then one could argue that it would be ‘equitable’ to
allow only citizens of Hillsborough to use it. In fact, allowing citizens of Chapel Hill to use the
13 However, the question of who is using different county government services can be answered through the results
of the survey.
58
CCM Economics, LLC Orange County Tax Equity Page 22
park facilities paid solely by Hillsborough citizens would be shifting the costs and benefits of the
park unequally.
IV. Government Revenues and Expenditures
The primary tax used to fund Orange County government and municipal government
services is the property tax. A list of all taxable properties within Orange County was acquired
and analyzed in Geographic Information Systems software. This included not only houses,
duplexes, apartments, mobile homes, empty lots, but also property taxes paid by businesses.
This list of properties was then subdivided based upon the location of the person paying the
property tax and not the location of the property. This is a very important distinction to make.
One of the interesting things about property taxes is that the person who is living in a particular
property might not be the one who is paying the tax.14
In 2016, Orange County records indicate that there were 51,630 properties within the
county border. The total billing in 2016 for these properties was $209,799,547 with recorded
payment of $207,367,352—or 98.8% of total amount billed. This amounts to an average
property tax bill of $4,063 per property. Of all Orange County properties, 2,954 were owned by
people outside of the state of North Carolina, for a total property bill of $19,303,658 and 4,361
were owned by people within North Carolina but not residing in Orange County. This subset of
properties was billed for $17,417,040.15 The average property tax bill for these two subsets is
$6,543 and $3,993 respectively. Therefore, the Orange County government is able to ‘export’
17.5%, or $36.7 million of its property tax bill to others who reside outside of the county. Figure
16 shows the locations of the owners of taxed properties. Note that some of the owners of
properties within Orange County do not even reside within the US; therefore, the map is focused
14 See Appendix B for clarity.
15 99% of billed property tax properties owned by persons outside of North Carolina were paid and 98.7% of billed
property tax properties owned by persons in North Carolina, but outside Orang e County, were paid.
59
CCM Economics, LLC Orange County Tax Equity Page 23
mostly on and around Orange County. Municipal boundaries are also outlined in red. The
reader will note that there is a significant number of Orange County property owners who reside
in Chapel Hill, but not in Orange County itself. From this data, one can determine the exact
location of each property owner and aggregate them by the different municipalities to determine
the per capita tax burden.
Figure 16. Location of Property Owners of Properties located
within Orange County
60
CCM Economics, LLC Orange County Tax Equity Page 24
Federal income taxes paid per capita was determined through a zip code level analysis of
IRS data. However, as Figure 17 illustrates, zip codes are not always fully contained within a
county line or municipality. Only 36% of zip code 27302 lies within Orange County. As
another example, 84.6% of zip code 27516 lies within Orange County and at the same time, zip
code 27516 includes households that are within two different municipalities—Carrboro and
Chapel Hill. A third issue might arise when a zip code fully contains all of a municipality, but
the municipality does not fully comprise the zip code. Such is the case with zip code 27278 and
the town of Hillsborough. Zip code 27278 is 96% within Orange County, but the town limits of
Hillsborough are fully contained within zip code 27278.
Figure 17. Zip code 27302 in Orange County
61
CCM Economics, LLC Orange County Tax Equity Page 25
To ensure that the tax burden from the zip code data of Orange County was properly
assigned and controlled for, GIS analysis was used to assign proportions of each zip code to
Orange County and the respective municipalities. However, GIS land area analysis was not
sufficient in and of itself. One also has to analyze where people live. Consider again the
aforementioned example of zip code 27278. The land area of the town of Hillsborough takes up
58.5% of the land area of the zip code; however, only 26% of the population of the zip code that
lives in Orange County lives within the town of Hillsborough. Therefore, detailed analysis of the
land area and population distribution was employed for each of the zip codes, municipalities, and
the county to determine the correct proportion of the IRS zip code level income statistics data to
assign to the respective 5 geographic subunits.
Retail sales taxes are the 3rd largest source of revenue for Orange County government.
Some states, such as Missouri, make detailed records about retail sales available to the public
and upon request. For example, in the 1st quarter of 2016, there were $3.2 million of retail sales
from bakeries within the city limits of Kansas City. From detailed records such as these one can
determine how much each household in and around Kansas City spent and how much cities
collected in sales taxes. The state of North Carolina does not release such detailed sales tax
records. Therefore, to determine sales tax paid on a per capita basis, one has to take the data that
is available on retail sales in the county and build models of a typical household’s spending.
These spending models are based upon income, household size and structure, and other
important characteristics. For example, a household that earns $35,000 per year will have
different spending habits then a household that earns $100,000 per year. This is true even if
these two households have identical family and age structure. Similarly, a 2-person household
62
CCM Economics, LLC Orange County Tax Equity Page 26
that consists of two retired persons will make slightly different spending choices than a 2-person
household that is still working even if both of these households have identical income.
The Census Bureau releases retail sales data for cities and counties via the economic
census. An examination of this data shows that in 2012 there was $1.385 billion in retail sales
for Orange County. Researching national and state level data on the performance of retail sales
since 2012, allows one to project that retail sales in 2015 were $1.522 billion in Orange County.
Even though 61% of the Orange County population is located in municipalities, approximately
92% of the retail sales occurs in the municipalities. This however does not mean that municipial
residents are responsible for 92% of total retail sales and are thus paying 92% of the sales tax.
Most retail businesses are located in municipalities—residents in the unincorporated parts of the
county drive into the municipalities for their retail purchases and thus contribute to total retail
sales and pay part of the sales tax.
The Census Bureau municipal and county data on retail sales was combined with the IRS
income data, disaggregated by income strata, to formulate a model of total retail spending for
each of the 5 geographic subunits by income strata which was then reaggregated to estimate total
retail spending for each geographic subunit. Once again, it was necessary to determine spending
by income category since high income households do not spend their dollars on the same sets of
goods and services that low income household do. Furthermore, high income households don’t
purchase total goods and services in the same proportion as low-income households. If a
household’s income doubles from $50,000 to $100,000, total retail sales will increase but they
will not double in size.
The remaining licenses, permits, and taxes are a relatively small portion of total revenue
for Orange County government. These taxes include taxes on motor vehicles, gross receipts,
63
CCM Economics, LLC Orange County Tax Equity Page 27
animal taxes, and the beer and wine tax. Other than the motor vehicle tax, these taxes constitute
a small amount of revenue for the county. In 2015, the motor vehicle tax collected $9.3 million.
Taxes such as these tend to correlate very strongly with property taxes. Other taxes, such as the
animal tax, only apply to people who license a new dog or cat, and correlate with population.
Other permits and fees include the privilege license that applies to different professions and
businesses such as pawn brokers, loan agencies, and check cashers. This license fees only
collected $15,000 in 2015. Other permits include the franchise fee which collected a little over
$300,000 in 2015.
The final category worth mentioning is Orange County fees for services. This includes a
wide range of activities including emergency management, deed registration, and the sheriff’s
office. Many of these fees are straightforward and can be easily assigned to the different
geographic subunits. For example, deed registration is flat fee that doesn’t change based upon
the location of the property, but on the number of pages in the deed. Similarly, marriage licenses
are a constant cost for every citizen regardless of where the live. Other charges for service are
related to quantity of the service provided. In 2015, the sheriff’s office received $2.311 million
for services—however, these monies are mostly derived from payments from the federal
government to offset the cost of housing federal inmates, and therefore should not be counted.16
A detailed inspection of the budgets and annual comprehensive financial documents for
the four different municipalities was also undertaken. A similar methodology to that used for
Orange County was used to assign per capita revenue and expenditures for each citizen in the
16 In essence, the citizens of Orange County have paid federal income taxes to the federal government. The federal
government has now taken some of these tax dollars and paid them back to the Orange County government to offset
the cost to the local citizen of housing federal inmates. This has the effect of canceling the cost to all citizens and
shifting it to the citizens who pay federal income taxes. Therefore, this ‘cost’ has already been counted once —in the
portion of taxes paid to the federal government. If it was to be counted again, it would be double counting and give
an inaccurate picture of how much citizens are actually paying for government services.
64
CCM Economics, LLC Orange County Tax Equity Page 28
municipality. The particulars of each municipalities’ revenue and expenditures differed
somewhat between the different municipalities, but still followed the same general pattern. The
largest component of revenue are property taxes followed by sales taxes and intergovernmental
transfers. These intergovernmental transfers are ultimately sourced from citizens federal and
state income taxes.
The total amount for taxes, fees, and service charges that citizens are paying on a per
capita basis is displayed in Table 4. The different sources of taxes are broken out by category,
followed by licenses/fees, and charges. These are totaled in two different ways. The first total
line is the summation of all taxes that Orange County citizens are paying to the local, state, and
federal governments on a per capita basis. As one can see, Orange County citizens are paying an
average of $9,500 per person to the government. This value ranges from a low of $5,400 in
Mebane to a high of nearly $12,600 in Chapel Hill. However, a large majority of the difference
in taxes paid is due to federal and state income taxes. Therefore, these are excluded in the
second tally, which only tallies taxes, fees, and charges to Orange County.17 These total per
capita tax amounts are then compared to the per capita income in each region. Recall that
Chapel Hill has a per capita income that is approximately twice the amount of the nation as a
whole and that Mebane is significantly lower than the nation’s as a whole. Under this metric, the
differences in taxes paid on a per capita basis is much smaller. Chapel Hill is paying
approximately 8.9% of its per capita income in taxation and fees (excluding federal and state
income) while the unincorporated sections of the county are paying 5.2%.18
17 Included in this tally are retail sales taxes of which a majority of these accrue to the state of North Carolina. The
amount that is granted back to municipal and county governments is much smaller than what is listed in this table.
18 Recall, that these percentages include some payments to the state governments such as sales taxes. In other
words, it would be a mischaracterization to say that Chapel Hill residents are paying 8.9% of their income to the
Orange County government.
65
CCM Economics, LLC Orange County Tax Equity Page 29
Table 4. Summation of Monies Paid Out by Orange County Citizens to
Governments on a Per Capita Basis
Orange
County Mebane Hillsborough Chapel Hill Carrboro Unincorporated
Federal Income 5,949.89 2,541.76 4,950.34 7,939.19 4,231.80 4,789.51
State Income 1,442.36 666.35 1,305.59 1,921.61 970.72 1,170.58
Property 1,235.01 2,130.45 2,579.43 2,275.59 2,046.26 1,016.18
Retail Sales 741.36 593.70 500.63 772.90 756.95 737.61
Motor vehicle 66.59 66.87 77.11 82.54 71.49 47.03
Other Taxes
(Animal, B&W,
Utility, etc.) 3.22 97.40 3.37 36.11 30.07 2.66
Licenses and
Permits 2.37 29.24 27.39 50.96 67.56 1.67
Charges (Deeds,
Aging,
Community
Planning, etc.) 69.05 170.10 147.90 133.17 92.44 69.04
Special Revenue
Funds 265.72 41.35
Total Payments 9,509.84 6,295.87 9,591.76 13,212.08 8,267.29 7,834.28
Total Payments
( No F+S taxes) 2,117.59 3,087.76 3,335.83 3,351.28 3,064.77 1,874.19
Total Payments
(pct. of income) 26.14 21.61 39.04 34.83 22.26 21.64
Total Payments
No F+S
(pct. of income) 5.82 10.60 13.58 8.84 8.25 5.18
Orange County and its municipalities provide many different goods and services for their
citizens with the tax dollars and fees that they collect. These are classified into several different
functions including community services, public safety, human services, education, support
services, and general government functions. There can be many different but related activities
within each of these functions. For example, general government functions at the county level
include deed registration, running elections and polling places are ensuring that votes are
tabulated correctly, running the county attorney’s office, etc.
66
CCM Economics, LLC Orange County Tax Equity Page 30
Most federal government spending on goods and services, including national defense,
can be classified as a pure public good.19 As an illustration, in 2015, the federal government
spent $58 billion on public order and safety, $18 billion on space exploration, $20.3 billion on air
quality, etc.20 Since these goods are public in nature, it is assumed that the benefits are equally
distributed among the population. Therefore, each person receives $3,030 in benefits from
federal government spending. The state of North Carolina spent approximately $21.7 billion in
2015. These monies also fund a wide variety of public goods such as education, public safety,
highways, state parks, and the like. From a per capita viewpoint, this totals to $2,144 in benefits.
These are illustrated in Table 5 which shows benefits from the different municipal and county
government programs.
To determine the benefits derived from municipal and county government spending, an
examination of county and municipal budgets was done—similar to the analysis to ascertain the
different sources of tax revenues. Not every municipality broke out similar expenditures in the
same category. For example, Chapel Hill classifies its spending on parks under the category
‘Lesiure” while Hillsborough’s can be found under ‘General’ government spending. Similar
issues occur for other spending such as ‘public works’ where Mebane classifies it under its own
category but other towns divide up ‘public works’ into different categories. A further instance is
Chapel Hill spending money out of its specialized separate funds for things that other cities
would classify as general government spending. For example, Chapel Hill spent $99,508 on
playground Replacement under their Capital Improvement Fund.21 To simplify the analysis of
19 See Appendix C for clarity.
20 This is the most recent year that detailed data on federal government expenditures is available from the Bureau of
Economic Analysis.
21 To make comparisons between municipalities simpler, Capital Improvement Expenditures such as the $99,508 are
counted in the same category as the $6.196 million spent on parks during the year.
67
CCM Economics, LLC Orange County Tax Equity Page 31
Table 5. Summation of Benefits Received by Orange County Citizens
from Governments on a Per Capita Basis
Orange
County Mebane Hillsborough
Chapel
Hill Carrboro Unincorp
Federal 3,030 3,030 3,030 3,030 3,030 3,030
State 2,144 2,144 2,144 2,144 2,144 2,144
F+S Grants 148.19 290.25 386.98 406.49 251.09 148.19
Community Services 29.35 325.12 394.35 475.82 29.35 29.35
Parks & Rec 23.44 139.61 23.44 139.52 103.70 23.44
ED/Tourism 5.36 121.53 65.48 80.58 17.69 17.86
Planning/Inspections 24.67 24.67 92.81 78.15 96.50 24.67
General Government 7.48 316.49 124.98 170.92 327.09 7.48
Elections 4.70 4.70 4.70 4.70 4.70 4.70
County Atty's Office 3.91 3.91 3.91 3.91 3.91 3.91
County Manager 4.07 4.07 4.07 26.06 23.21 4.07
Deeds/town clerk 6.42 6.42 6.42 6.42 12.98 6.42
Tax admin 23.16 23.16 23.16 23.16 75.55 23.16
Public Safety 2.99 431.89 2.99 2.99 2.99 2.99
Emergency services 62.00 62.00 234.48 208.67 204.24 62.00
Sheriff/Police 84.44 45.43 456.23 249.91 239.36 162.53
Human Services 19.27 19.27 19.27 19.27 19.27 19.27
Dept of Social Services 153.22 153.22 153.22 153.22 153.22 153.22
Aging 14.88 0.00 15.10 15.10 15.10 15.10
Health Department 56.68 56.68 56.68 56.68 56.68 56.68
Housing 1.59 2.60 2.60 43.30 2.60 0.54
Library Services 14.19 14.19 14.19 62.43 14.19 14.19
Library Municipal 4.06 4.06 4.06 12.97 4.06 4.06
OPC Area Program 9.68 9.68 9.68 9.68 9.68 9.68
Education 548.35 548.35 548.35 548.35 548.35 548.35
Support Services 50.18 50.18 54.22 50.18 119.27 50.18
Asset Management 28.46 28.46 28.46 28.46 28.46 28.46
Human Resources 5.79 5.79 15.40 30.31 36.17 5.79
Debt Service 194.74 273.66 315.49 301.14 249.44 194.74
Total Benefits 6,705 8,139 8,235 8,382 7,823 6,795
Total Benefits no F+S 1,531 2,965 3,061 3,208 2,649 1,621
Total Benefits
(pct. of income) 18.43 27.94 33.52 22.10 21.05 18.77
Total Benefits no F+S
(pct. of income) 4.21 10.18 12.46 8.46 7.13 4.48
Net Summation -2,804.57 1,843.54 -1,357.03 -4,829.68 -444.41 -1,039.25
Net Sum No F+S -586.32 -122.35 -275.10 -142.88 -415.89 -253.16
Net Summation
(pct. of income) -7.71 6.33 -5.52 -12.73 -1.20 -2.87
Net Summation
No F+S
(pct. of income) -1.61 -0.42 -1.12 -0.38 -1.12 -0.70
68
CCM Economics, LLC Orange County Tax Equity Page 32
county and municipal government spending and revenues, the county’s classification system was
used and municipal spending was placed into the most appropriate general category (e.g.
“Human Services”) or specific category (e.g. “Housing” which is a sub-category of “Human
Services”).
As the reader will note, the net summation of benefits excluding federal and state
spending and taxes is slightly negative. This is due to a couple of factors. One of the categories
under the benefits section is ‘Debt Service’. Debt service are principal and interest payments for
county and municipal debt that was incurred in the past to pay for projects that have a long life—
such as an arena, park, municipal building, street, etc. These projects are continuing to provide
benefits to taxpayers today and these benefits are reflected in the value of the principal
repayment. The interest paid however was excluded from the ‘benefits’ taxpayers receive since
it is not a reflection of benefits received.
Similarly, the county and cities have tax revenues received today that are being funneled
into long term funds for use in future years. In short, these long-term funds are similar to a
household’s savings account. As with interest payments, these ‘savings’ are not counted as
benefits today—but they will become benefits in the futures as they are spent on the projects that
they are being saved for.
The larger issue of tax equity is apparent in the inclusion of the federal and state taxation
and benefits which shows a fairly significant negative amount. This is due to the progressive
nature of the income tax within the United States. Recall that approximately 45 to 47 percent of
US households do not pay any income taxes, but almost all US households receive benefits from
residing in the US. Therefore, the tax burden to provide benefits to all US households falls
69
CCM Economics, LLC Orange County Tax Equity Page 33
primarily on the 55 to 53 percent of households who pay federal income taxes. Since Orange
County, and Chapel Hill in particular, are relatively wealthy compared to the average US
household, this inequity is especially pronounced.
An alternative method of determining benefits was done via a public use survey.
Orange County residents were asked about their use of several county provided facilities
including the different libraries, parks, health centers, and senior centers located in the county as
well as the public transportation, recycling, and Wi-Fi. There were a total of 478 responses with
95% of the respondents being from Orange County. Table 6 breaks out the residency status of
respondents.
Table 6. Residences of Respondents
Municipality Percent
Carrboro city limits 8.8%
Chapel Hill city limits (as part of Orange County) 19.2%
Durham city limits (as part of Orange County) 1.3%
Hillsborough city limits 20.1%
Mebane city limits (as part of Orange County) 2.5%
Unincorporated area, but within Orange County 43.1%
I do not reside in Orange County, North Carolina 5.0%
In general, there a somewhat widespread and fairly equal use of most county provided
services. This is illustrated in Table 7 which outlines the percentage of respondents indicating
usage of the different categories of county provided services such as parks, library facilities,
senior citizen centers, health centers, recycling, transportation services, and Wi-Fi. The general
category is noted in bold and italics and is centered and the general category usage statistic is the
average level of usage for all facilities in that category. For example, 9 out of 10 Chapel Hill and
Carrboro residents use the Chapel Hill branch of the library, but only one out of four residents
from Mebane use these library facilities. Residents of Mebane prefer to use the Main Library
where 75% of them report using this facility.
70
CCM Economics, LLC Orange County Tax Equity Page 34
Similarly, 2.4% of Carrboro residents reported using the Central Recreation Center, but
more than half used the River Park. The average usage of the different parks for Carrboro
residents was 12.5%. Concerning parks consider Figure 18 which shows the spatial location of
parks within Orange County and Figure 19 which highlights the homes located around the parks
within a distance of half a mile. A cursory examination of the map shows that the parks are not
equidistant from each other. Although there is less use of county parks from Chapel Hill and
Carrboro residents, there is the possibility that park usage is much more equal than appears.
71
CCM Economics, LLC Orange County Tax Equity Page 35
Table 7. Category Average and Facility Specific Usage by Survey Respondents
Orange County Carrboro Chapel Hill Hillsborough Mebane Unincorp
Parks 22.7 12.5 11.3 30.7 30.5 25.7
Blackwood 28.6 7.1 15.2 42.1 25 32.8
Cedar Grove 19.6 9.8 11 15.8 25 26.6
Central Rec
Center 20.2 2.4 4.4 36.2 33.3 23.2
Efland-Cheeks 10.3 2.4 3.3 11.7 50 11.8
Fairview 12.9 2.4 1.1 25 8.3 14.9
Hollow Rock 15.5 19.5 18.9 16 0 13.4
Little River /
Nature Area 23.9 9.8 8.7 23.7 41.7 32
River Park /
Farmer's Mkt 60.2 51.2 31.9 83 66.7 63.3
Soccer.com
Center 13.3 7.7 7.7 22.8 16.7 12.8
Library 36.9 49.3 37.9 40.7 32.1 32.6
Main Library 59.6 26.8 15.9 86.4 75 71.2
Carrboro
Branch 10.3 34.2 10.3 8.7 0 6.4
Cybrary 8.6 33.3 6.8 8.6 0 5
CH Public
Library 50.2 90.2 90.1 35.1 27.3 33.5
Online
Resources 55.5 61.9 64.4 62.8 54.5 47.3
Transportation 2.8 6 2.2 4.5 4.2 1.6
Hillsborough
Connector 3.1 4.8 3.3 7.3 8.3 0.5
Orange-CH
Connector 4.7 9.5 4.4 8.4 8.3 2
Disabled / Para 1.8 2.4 1.1 2.1 0 2
Senior Center
Trans 1.6 7.1 0 0 0 2
Senior Centers 17.7 16.6 19.6 20.5 0 17.3
Passmore 17.5 7.1 8 25.5 0 21.1
Seymour 18.3 26.2 31.1 15.4 0 13.4
Health Clinics 5.6 1.6 3.3 6 16.6 5.5
Dental 4.6 0 1.1 5.2 16.7 5.9
Medical
(Hillsborough) 7.7 0 2.2 11.6 25 8.3
Medical (CH) 3.8 4.8 6.5 2.1 8.3 2.4
Recycling 87 85.4 85.9 85.4 91.7 94.2
WiFi 63.6 69 51.1 60.5 49.9 68.4
72
CCM Economics, LLC Orange County Tax Equity Page 36
Figure 18. Spatial Location of Parks in Orange County
73
CCM Economics, LLC Orange County Tax Equity Page 37
Figure 19. Homes within Half a Mile of Orange County Parks
74
CCM Economics, LLC Orange County Tax Equity Page 38
To see this return to the example of the Chapel Hill Public Library. Of the people self-
identifying as being from Chapel Hill, approximately 10% stated that they never used the Chapel
Hill library. Of the people self-identifying as being from Carrboro, again approximately 10%
stated that they never used the facilities. However, it’s possible that this 10% of the people from
Chapel Hill and Carrboro who stated that they don’t use the Chapel Hill Public Library use one
of the other library facilities such as the Main Library in Hillsborough.22 Or take the example of
Hillsborough’s residents and their stated use of the Orange County Medical facilities. Of the 95
responses, 5 indicated that they have used the Dental Clinic, 11 had used the medical clinic in
Hillsborough, and 2 had used the medical clinic in Chapel Hill. Therefore, 5.2% had used the
Dental Clinic, 11.57% had used the Hillsborough branch of the Medical Clinic, and 2.1% had
used the Chapel Hill Medical Clinic.
To see how total usage of county services could be higher than is implied from Table 7
imagine that there is a city with only two residents, ‘Able’ and ‘Barb’. Abe states in the survey
that he never uses the Passmore Senior Center but that he does use the Seymour Senior Center—
Barb states the exact opposite. This would show in the Table 6 usage table as 50% usage of both
of the facilities, when actually 100% of the senior citizen center facilities are being used by the
residents. Therefore, the survey respondents’ use of public facilities is shown in a different way
in Table 8. Table 8 calculates the maximum possible usage of county provided services based
upon the survey results and assuming that survey respondents were exclusive in their usage.23
22 Recall from Table 7 that approximately 16% of people who reside in Chapel Hill and 27% of people who reside in
Carrboro stated that they use the Main Library in Hillsborough.
23 As another option, the survey could have had an individual question for each different park, medical facility,
library, etc. rather than grouping them into similar categories to avoid this problem of exclusive usage. This would
have added 18 additional questions to the survey though and more than doubled its length and thus lowered the
response rate.
75
CCM Economics, LLC Orange County Tax Equity Page 39
Table 8. Public Usage Survey Results By Municipality—Maximum Possible Usage
Orange County Carrboro Chapel Hill Hillsborough Mebane Unincorp
Parks 100 100 100 100 100 100
Library 100 100 100 100 100 100
Transportation 11.95 23.8 8.69 17.7 16.6 6.3
Recycling 87 85.4 85.9 85.4 91.7 94.2
Senior Center 34.87 33 38 40 0 34.14
Health 16.7 4.76 9.7 19.35 50 16.58
WiFi 63.6 69 51.1 60.5 49.9 68.4
V. Conclusions
The problem of equity vis-à-vis government provided goods, services, and tax burdens is
an issue of growing interest to taxpayers, government leaders and administrators, and other
stakeholders. All sides want to ensure that taxation, and the government provided benefits that
taxation brings about, are distributed as equitably as possible. Unfortunately, there is not an
objective definition of what ‘equity’ actually is and therefore the topic of equity is normative in
nature. Nevertheless, this report has suggested two possible definitions—equity on the basis of
ability to pay and equity on the basis of usage. The first definition means that those households
that have higher levels of income/wealth should generally pay a larger share of taxes and receive
smaller shares of benefits than less affluent households. Of course, the exact ratio of these
taxation and benefits shares is once again a normative issue.
The second definition means that, generally speaking, households should pay taxes to
fund the government provided goods and services that are available to them and that they not pay
taxes to fund government provided services that are not provided to them. This second definition
of equity can be tricky to accurately calculate though as the example of public education shows.
Even though a household might never have any children in the public school system that does
not mean that they don’t receive any benefits from the provision of public education. The doctor
that operates on them, the engineer who builds the roads that they drive on, and the park ranger
76
CCM Economics, LLC Orange County Tax Equity Page 40
who preserves the park that they visit all could have been educated in a public school system.
Therefore, even though the household doesn’t have children in the school system, they are
beneficiaries of the school system by getting to live in an organized and educated society.
This report has used municipal and county budgets combined with other census and
economic data to understand which county level government goods and services are available to
which citizens of the different geographic areas of Orange County. Furthermore, this report has
estimated the federal, state, and local tax burden for the average citizen of each of the different
geographic areas in Orange County. The results show two different yet interesting things. The
first is that most of any imbalance between taxes paid and benefits received is derived from
inequities in federal spending and taxation levels and not from county government spending and
taxation policies. For example, Chapel Hill residents on a per capita basis are paying nearly
$8,000 in taxes to the Federal government but only receiving $3,000 in services from the federal
government for a net imbalance of -$5,000. In comparison to the county provided goods and
services, Chapel Hill residents are paying $3,300 in taxes and fees and receiving $3,200 in
county provided goods and services. In short, if citizens want to see a more equitable
distribution of taxes and services, they should petition their national level representatives.
The second thing that is of note in the results of this report is that the ‘negative’ amount
of net summation of goods and services at the local level as reported in Table 5 is something of a
misnomer. Recall that the municipal and county level governments collect revenues today from
a variety of sources to pay for today’s provision of good and services. However, some of these
revenues that are collected today are shifted to reserve funds that will be used to pay for the
future provision of goods and services. This report has adopted a ‘snapshot methodology’
concerning local government spending and taxation. This ‘snapshot’ of current revenues is
77
CCM Economics, LLC Orange County Tax Equity Page 41
‘counting’ county and local taxes collected today as a burden or cost to its citizens. In the same
way, today’s expenditures are ‘counted’ as a benefit to its citizens. Therefore, if a municipality
saves some of its revenues today for future spending by shifting it into a reserve fund, it would
appear that today’s revenues, i.e. costs, are larger than the expenditures, i.e. benefits. In essence,
one should think of today’s tax revenues that are being collected and shifted to reserve funds as
being placed into a ‘savings account’ even though the net benefit today is ‘negative’. It is a
similar analogy to a household that brings in $100,000 in income, spends $90,000, and saves
$10,000 for future spending. The household has incurred the time and effort costs of earning
$100,000 in income but appears to only be getting $90,000 in benefits from consumption and
spending.
78
CCM Economics, LLC Orange County Tax Equity Page 42
Appendix A
In order to determine the true amount of government provided goods and services
citizens are receiving and paying for, it is helpful to calculate how much citizens pay in federal,
state, and local taxes and how many of these upper level government taxes are transferred to the
local governments. Consider the simplifying example of a county that consists of 100 people
who each pay taxes of $100 to the federal government, $25 to the state government, and $10 to
the local government. These citizens have a total tax bill of $135. Assume that the local
government provides a service for each citizen that costs $50. However, not all of the taxes paid
to the federal and state tax governments are used at the federal and state level. Suppose that the
federal and state governments transfer $30 and $10 respectively to the local government to help
fund the local government provided service that costs $50. In short, the federal and state
governments are serving as a ‘tax collector’ for the local government. There would be no
difference between the federal and state governments collecting $125 in taxes and transferring
$40 to the local government or the federal and state governments collecting $70 and $15 in taxes
respectively and having the local government collect $50 in taxes.
79
CCM Economics, LLC Orange County Tax Equity Page 43
Appendix B
Consider the hypothetical situation of Mr. Smith and Mr. Jones. Mr. Smith is renting and
living in a house owned by Mr. Jones. The house is located in Mebane so that Mr. Smith is
living in Mebane. However, Mr. Jones, the owner of the property, actually lives in Georgia and
receives the tax bill at his home address in Atlanta, Georgia. Mr. Jones pays the property tax bill
which is used by Orange County government to provide government services to Mr. Smith. Mr.
Smith, an Orange County resident, pays none of the property tax but receives the benefits of the
Orange County provided government services. Mr. Jones, a Georgia resident, pays all of the
Orange County property tax, but receives none of the Orange County provided government
services. In situations like this, Orange County is in effect, exporting its tax burden to Atlanta,
Georgia.24
It is possible under special conditions that some of the property tax burden that Mr. Jones
faces can be shifted to Mr. Smith in the form of higher rent on the property so that in effect, Mr.
Smith is ‘paying’ part of the property tax via higher ‘rent’. Also, it is possible that Mr. Jones
will still receive some of the benefits of the Orange County government provided services even
if he doesn’t live in Orange County. This could occur through government provided benefits that
indirectly help Mr. Jones through lower homeowners insurance costs, increased property values,
etc. In effect, Orange County has now ‘exported’ some of the government provided benefits
derived from the property tax. Since there is no data on these special conditions, they are
ignored. For simplicity, it is assumed that Orange County is exporting its tax burden to any
property tax payer who doesn’t live in Orange County. Furthermore, it is assumed for this study
that any resident of a municipality within Orange County who owns property in another part of
24 The concept of tax exportation by local and state governments is well understood, but it can be difficult t o
quantify the exact amount of a tax that is truly exported.
80
CCM Economics, LLC Orange County Tax Equity Page 44
the county is shifting his tax burden between municipalities. In other words, if a citizen of
Chapel Hill owns property in Hillsborough, the amount of the property tax from the
Hillsborough property is attached for reporting purposes to the tax burden for Chapel Hill.
81
CCM Economics, LLC Orange County Tax Equity Page 45
Appendix C
One of the interesting things about publicly vs. privately provided good is the nature of
the goods. To determine if a good is a public good or a private good, economists use two
criteria: excludability and rivalry. If a good in non-excludable, it is impossible, or at least very
expensive, to exclude non-payers from consuming the good. If a good in non-rival, then one
person’s consumption doesn’t diminish the amount available to others to consume. Public goods
are both non-excludable and non-rival. National defense is a great example of a pure public
good. It is impossible to exclude people who reside within the borders of the United States and
don’t pay their taxes from receiving the benefits of national defense. At the same time, if
another person is born in the US, there is still the same amount of national defense available to
everyone as there was before the person was born. On the other hand, a candy bar is both
excludable and rival. Stores can relatively easily keep people who don’t pay for candy bars from
consuming a candy bar and if someone eats a candy bar, that particular candy bar isn’t available
to others to consume. Because of these properties, public goods will not be provided in the
correct quantities if they are provided by the private sector—hence they are often provided by
the public sector.25
25 Interestingly, to determine the value of public goods to society, one adds ‘vertically’ a s opposed to adding value
‘horizontally’ for private goods. To illustrate, assume that pizza is a private good and that there are 3 people in a
society. At a price of $10, Abe buys 2 pizzas, Barb buys 3 pizzas, and Charles buys 4 pizzas so that at a pric e of
$10, the market demand for pizzas is 7 meaning that the 7 th pizza is worth $10. Now assume that a park is a public
good and that the government provides one park at a cost of $10. Abe values the park at $5, Barb values the park at
$12, and Charles values the park at $20. The value of the park is $37 and the government has created $27 of
‘consumer surplus’ by providing the park.
82