Avery County Transfer Tax Succeeds - Not
Submitted by gregflynn on Tue, 02/03/2009 - 9:31pm
It looks like the transfer tax referendum was approved in Avery County today.
According to the State Board of Elections, with 19 of 19 precincts reporting the votes were 1,434 for and 1,409 against (50.44% for and 49.56% against). A total of 2,843 votes were counted out of 2,845 cast. Turnout was 22.40% of 12,700 registered voters.
As the County Commissioners appear to have wanted this authority it is likely to be put into effect.
From the statutes authorizing the tax:
If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of county commissioners may, by resolution and after 10 days' public notice, levy a local land transfer tax on instruments conveying interests in real property located in the county, up to a rate of four-tenths percent (0.4%), in increments of one-tenth percent (0.1%).
According to Go Blue Ridge proceeds of the 0.4% tax are intended for classroom renovations and most land transactions in the last two years were among non-resident buyers and sellers.
Update:
There were errors in election night precinct reporting. The official results show 1,414 for and 1,449 against, which is a margin of 35 to defeat the transfer tax. At 49.39% for 50.61% against the margin is still less than 1%.
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Is this the only county to
Is this the only county to pass the transfer tax? I can't recall it coming close to passing anywhere last year. The Real Estate pac most have been asleep at the wheel.
I'm a moderate Democrat.
Avery is first for 0.4%
To be honest I wasn't paying attention to it until recently but the realtors were campaigning against it.
They formed another typical astroturf group "Avery County Property Owners Against the Transfer Tax" and had the help of the John Locke Foundation
Avery is the first in this particular statewide authorization. Six other NC counties have had transfer tax authority for some time.
Yay!
I wish Union County voters were that smart.
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Vote Democratic, the ass you save may be your own.
25 vote margin
Story being confirmed by Go Blue Ridge
This is big news in local government as this is the first county to have voted for the transfer tax since authority was given in 2007 for either a 0.4% transfer tax or a 0.25% sales tax subject to voter approval.
I see dead people
Do the six percenters have sixth sense? According to folks commenting on that Go Blue Ridge story the realtors campaign against this was over the top, including use of the names of dead people as well as irate living people who did not give permission for their names to be used.
Wow....that's just wrong
I hope there are legal repercussions for them.
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Vote Democratic, the ass you save may be your own.
A lot of other counties are probably regretting that they don't
have the option now. Not that they'd necessarily use it ... but they don't even have it.
Local Options
Part of Avery's motivation in acting was fear that the new General Assembly might rescind the authority for voting on the options (sales or transfer tax). Although, one suggestion has been for the GA to remove the requirement to hold a referendum and simply give the counties authority to use the options especially as the GA is likely to push some costs back on the counties to balance the budget.
No Transfers, No Revenue
I believe that I'm the only one here maybe that wishes that the transfer taxes would not pass. When that tax was proposed for my county, business was booming and the Register of Deeds office had all it could handle in closings. Now, the county couldn't eek out enough revenue from transfers for even bare bones operations. They would have to continually adjust our ad valorem taxes to make up for the fluctuating amount of transfers. That was the main reason it got defeated here.
misread
well, that will teach me. I just wrote a pithy response to something you didn't say.
The transfer tax might not be the end-all, be-all. But, consider that if the transfer tax had been in place since the 1970s then all us immigrants would have paid it for all the new houses that were built in North Carolina. Those taxes would have paid for the new schools and parks and libraries. YOUR property taxes would have stayed relatively low, maybe not 1970s low, but LOW.
So, ask yourself this. Is North Carolina done growing? If the answer is yes, then we should not worry about the transfer tax. But, if the answer is no, then the transfer tax is a way of increasing infrastructure with increasing demand for infrastructure.
Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me
No transfers, no need
The transfer tax should be one that gets growth to help pay for itself. Transfer tax revenue, if allocated for capital expenditures and not to operations, should not be a problem if it fluctuates. After all, your ad valorem taxes will fluctuate based on needs without the transfer tax, so how could it hurt to have a new revenue stream that is at least partially tied to the growth that necessitates the extra spending in the first place?
Well said, and exactly the pro-transfer tax aim, SPLib
The entire and ONLY purpose of a transfer tax is to help local gov'ts pay for the added infrastructure made necessary by growth ...
new schools for kids moving into a county,
new sewer plants for families and businesses moving into a county,
additional fire and police and rescue services for all the new developments,
additional parks and rec and medical facilities so quality of life keeps up with growth.
If growth is strong, the need for the revenue increases as receipts increase. Cool. If growth slows, the need for the revenue slows as receipts slow. Not a problem.
We pay for the growth-induced building-outs now with constantly increasing property taxes/valuations on everybody: seniors, young couples, big families, long-time residents and new comers alike. A transfer tax just allows government in a growing county to relieve the pressure on property taxes by getting some money upfront for building out all that new infrastructure.
We average Joe voters have been choosing very UNwisely lately ... up until Avery woke up and showed us how it's done. Thank you, citizens of Avery County.
"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."
Guilford County defeated the transfer tax
at the same time as it approved every damned bond on the ballot. Somehow I don't think the voters know where the funds come from to PAY for all those things. There seems to be a disconnect when it comes to paying property taxes and voting for every expensive bond that comes along.
Progressives are the true conservatives.
If only
That would be great if our taxes were spent on these things. And Avery county may be a lot different. But, here our taxes have gone to pay for mainly buildings at the county complex. We have a 50 million dollar surplus in the coffers and our schools are way behind in building projects. Due to the growth in the county during the boom, ad valorem taxes went way up due to reassessment. One seventh of my yearly income goes to property taxes. We have an all republican board of commissioners that really pushed this transfer tax, even prodding county employees to promote it at county expense. They told us that there wouldn't be enough money for schools if this did not pass. A number of the handful of counties that approved this tax saw their ad valorem taxes increase anyway. I agree with what you are saying about needs, but the transfer tax just looks like another money source for misspending commissioners to a lot of us here.
Not sure you really get it
Reassessment or revaluation does not cause overall taxes to go up. If eveyone's taxes went up, it is because your commissioners increased their budget and raised the overall tax levy. Of course, they'll tend to hide this behind a tax "cut" after revaluation by lowering the rate some but not as much as it would take to have the same overall levy as before the revaluation.
If the commissioners want or need more money, they'll get it one way or another. If they need millions for new schools or other infrastructure, they'll raise property taxes if they don't have another choice. So, if it is inevitable that all that money be raised to build more schools, etc. isn't it at least slightly more fair that a tax that better targets the very growth necessitating the expansions help out?
Here's another way to look at it. Let's say your town or neighborhood has 400 people in it. You moved in 20 years ago when it was new and were in the first 100 residents. The first 100 paid the full cost of the schools and infrastructure they created the need for. The second 100 moved in and created the need for infrastructure for 100 more people. Since the only revenue stream is property taxes, this time the first 100 paid for half of the second 100's infrastructure needs. The third 100 come and share their burden with the first 200. The final 400 end up paying for only 25% of the expansions they caused the need for. The poor first 100 on the other hand have paid twice their share.
Sure, nothing is as clean and tidy as my example. Sure a transfer tax is not a precision instrument targeting only new growth. But the basic premise rings true. Without alternatives to ad valorem taxes, newcomers get off easy and those who have already paid more than their "share" just have to keep on subsidizing them.
This tax is paid by the seller
I do agree about targeting taxes toward the ones who create the need, but the Tr-tax is a burden on the seller, not the buyer. Just to clarify,our reassessment was supposed to be revenue plus one. Our personal taxes tripled after the rate decrease and the revaluation. Now the market value of our homes are half of what they were before revaluation and we are stuck with these high rates for a while. If we really want to tax those coming in, why not charge an impact tax on them if they are either buying or building a new business or home. That would seem fairer and possibly make more money.
Not really on the seller
Do you really think at least half of a transfer tax will not be pushed onto the buyer? Think about new homes; is the developer really "eating" the tax? No, they'll pass it along like they do their other costs.
If your property tax went up more than others in your town, it is becasue your home gained more value than other neighborhoods. In the end, you'll benefit from that additional proportional value when you sell.
Impact fees target growth much better than the transfer tax does. Unfortunately, the legislature under pressure from their bankrollers in the realty and homebuilding biz made sure that something as likely to pass a local referendum as an impact fee would not be an option for local governments. The transfer tax is much easier to distort and defeat than impact fees and thus the realtors and homebuilders let it slip through for local referenda. I'd bet a wad of cash that if impact fees had been the option instead of transfer taxes, Avery County would have a lot more company on the winning side.
Tax facts
Because counties get much of their money once a year they keep a cash reserve known as a fund balance that ranges from about 20% to 25% of prior year expenditures depending on the county (may be higher or lower) consistent with State Treasurer Policies. It is not a surplus. Maintaining a healthy fund balance is important in maintaining good bond ratings that allow for borrowing at lower rates.
The John Locke Foundation has been misleading people in papers prepared for every county with a sales or transfer tax referendum in recent years by suggesting that counties should reduce their reserves to critical minimums. This is fiscally reckless. The Local Government Commission recommends an absolute minimum of 8% with additional reserves, consistent with similar counties, to handle unforeseen and anticipated outlays. Chowan County got into fiscal trouble last year by depleting its reserves.
The bulk of county revenues come from property taxes. Sales tax is next in line. When more revenue is needed it is typically one of those two that are increased. Sales tax revenue has been in decline because fewer transactions are being taxed as we move to a service economy, make fewer things and buy off the internet. That leaves property tax. A transfer tax would take some of the weight off. Broadening the sales tax base is also a goal but unlikely without the will of the General Assembly.
Property taxes don't typically go up on average because of reassessment. Reassessments are required to be revenue neutral but some people will see their taxes rise while others will see a decline because the valuations are recalibrated relative to each other. Since taxes paid usually go up every year there is usually a greater awareness of this increase immediately after a reval.
To date Avery is the first county to get to use the 0.4% tax. Six other counties have been using a 1% transfer tax quite successfully since they were previously given individual authority to do so. If you have some evidence to the contrary you'll have to be specific. Every county already has a 2% transfer tax known as the excise tax. 1% goes to the county general fund. 0.25% goes to the Natural Heritage Trust Fund and 0.75% to the Parks and Recreation Trust Fund.
Avery recount pending
There may be errors that reverse the vote. Official results tomorrow. Recount likely.