A new Center for Local Innovation report highlights the increasing burden local governments in North Carolina place upon taxpayers through increased local taxes and fees — and shows Charlotte and Mecklenburg County to be the highest-cost jurisdictions among large cities and urban counties, respectively.
The report, “By the Numbers 2004,” calculates the amount of revenue each county and municipality collects per capita from property and sales taxes and other taxes and fees. For fiscal 2001-2002, the latest period for which information is available, the report shows the typical amount collected per person by local governments in taxes and fees increased by nearly 6 percent over the previous year.
Local governments in North Carolina are required to file audited financial statements with the Department of State Treasurer each year. “By the Numbers” builds upon this information, which is available online .
The center’s analysis examines property tax, sales tax, and total local government collections of all taxes and fees. For each category, a revenue per-capita figure is computed. “By the Numbers” lists the per-capita combined county and municipal property, sales, and total local tax and fee collections for every community in the state. Municipalities are divided into four population groups and ranked against each other in the three categories. Counties were also ranked against each other.
The amount local governments collect per person tells only part of the story. Per-capita personal income varies widely across the state. County-only and county-plus-municipality collections are also given as a percent of per-capita income in “By the Numbers.”
While “By the Numbers” shows the cost of local government, it does not attempt to measure the quantity or quality of services provided in exchange for those dollars. Nor does the report consider the additional out-of-pocket costs to individuals for services that their local government may not provide. In unincorporated areas, for example, homeowners may have to contract privately for garbage pickup, while those living in a town or city may well receive this service, paid for through their municipal property and other taxes. Municipalities may also use some of their tax dollars to provide a higher quality of fire protection, which may translate into lower homeowners insurance rates.
In fiscal 2001-02, the average resident of the median county in North Carolina paid $968 in taxes and fees to county and municipal governments. This accounted for 4.21 percent of personal income and represents a 5.7 percent increase over 2000-01, when collections were an inflation-adjusted $916 or 4.07 percent of personal income. Collections in 1999-00 were $920 per capita, or 4.14 percent of personal income.
The growth in local revenues was broad-based; per-capita collections were up in 85 of the state’s 100 counties.
The weakening economy also had an effect on local government finances. Per-capita sales taxes were lower in most jurisdictions in 2001-02 than in 2000-01. Almost all of the increase in local government revenues from 2000-01 to 2001-02 came from higher property tax collections. In 2001-02, median property tax collections were $510, or 2.10 percent of personal income.
Among large and comparable urban areas, Mecklenburg ($2,092), New Hanover ($1,791), and Durham ($1,780) ranked high in the average revenues per paid collected by county and municipal governments.
More generally, Dare and Currituck counties were among the highest ranked, but this is in part due to the statistical quirk created by large numbers of out-of-county landowners and tourists. Hoke, Caswell, Gates, Alexander, and Madison county residents paid the lowest average amounts in taxes and fees to local governments.
The results were somewhat different when looking at the local tax burden as a percentage of personal income. Dare County again leads the way with county and municipal revenue accounting for 11.37 percent of per-capita personal income. Second through fifth were Brunswick (7.13 percent of per-capita personal income), Hyde (7.13 percent), Bladen (6.94 percent), and Currituck (6.86 percent) counties.
By comparison, taxes and fees collected by local government accounted for 2.72 percent of personal per-capita income in Alexander County. In eight other counties , total collections were at 3.25 percent of per-capita personal income or less.
Among the 25 cities with populations over 25,000, Charlotte had the highest combined city-county tax and fee collections per capita. The lowest per-capita collections were in Jacksonville.
The full report is now available online.
Michael Lowrey is associate editor of Carolina Journal.