Thursday, September 20, 2007

16 N.C. Counties Asking for Land Transfer Tax

Fast-paced growth, which is straining schools and water systems, has led 16 North Carolina counties to put a referendum for a county land transfer tax on their ballots this November. The option to levy the tax just passed the N.C. legislature and requires a local referendum.

Originally, counties had asked the state for the authority to levy a 1 percent land transfer tax, but legislators agreed to let counties levy only a 0.4 percent tax, for sellers to pay at closing.

Polk County is one of the 16. It's estimated that the tax there would raise $1 million per year, which "won't cover all our needs" (not by a long shot), said Polk County manager Ryan Whitson.

Robeson County is another of the 16. The county ranks 97th in the state for per-capita income. The county pays $10-12 million annually for Medicaid, leaving little money to fix Robeson County Community College's leaky roof, which will cost $3 million. The land transfer tax, if it passes, probably won't raise that much.

Chatham County is also on the list of 16. The county has approved more than 15,000 new homes. "Our schools will soon be severely overcrowded, and projections show we will need one to three schools a year to catch up," said a Chatham Co. commissioner. If it passes, the land transfer tax would give Chatham an estimated $3.5 million in 2009. Chatham commissioners have pledged that a majority of the money will go toward the county schools.

Big "IF" ... if any of these county referenda pass. Especially with the N.C. Realtors Association and the Home Builders Association lined up to fight the tax in all 16 of those counties. The Realtors Association spent $600,000 to fight the land transfer tax at the General Assembly last summer ... and lost. It'll probably be easier to win in those county elections (also potentially more expensive, overall), where fear tactics may prove more potent.

Franklin County commissioners voted Monday evening to stop allowing new residential developments from connecting to its water and sewer utility network because the county had reached 80 percent of capacity of its water and sewer connections. Franklin County is north of Raleigh International Airport and in the Raleigh-Cary metro area.

The commissioners' action means that new subdivisions will have to rely on wells for water and septic tanks for sewer.

Much of the problem can be traced to poor planning: "There are 5,500 empty lots within county limits that have water rights but aren't producing income for the county. Some lots have lain fallow for years, approved under ordinances that set no time limits to build. One subdivision, Olde Liberty, has tied up enough water for 1,450 three-bedroom homes for more than seven years. Of those, only 20 to 30 homes have been built ....That leaves Franklin County with only 2,500 water customers to pay the $19 million in debt the county has spent over the past several years to improve its utilities."

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