News: Charlotte Exclusives

Rotten to the Core-Service

City contemplates tax hikes for business handouts, uptown traffic, light rail support

All rhetoric about an austere, core-services budget to the contrary, Charlotte’s profligate spending plans for 2006 and beyond are made clear by a single line-item in the proposed operating budget. The city’s Business Incentive Grant program, which hands out cash to companies threatening to leave town, would grow to a whopping $328,000 by 2007. This is a program that as recently as 2002 spent only $45,000 and, by rights, has exactly no claim on the public purse.

This is why city property and business taxes have to go up? Evidently.

In fact, as evidenced by the millions of dollars in what can only be called very discretionary spending for travel, tourism, dubious econ development plans, and various municipal and cultural organizations, the tax hike itself seems very discretionary. At the very least, tax hikes undertaken to support the city’s current non-core spending array cannot hide behind added spending on police or fire protection as their driving impetus. Charlotte is simply on a spending binge and does not want to let up.

This is revealed by the overall revenue growth the city plans. The city’s property tax take will grow from $186.5 in 2002 to an estimated $251 million in 2007. That’s 25 percent growth in just five years. The other primary source of revenue for the city general fund, the sales tax, shows even an even stronger upward trend. The sales tax raised $33.4 in 2002 and is projected to reach $49.7 in 2007, a 42 percent increase.

No wonder then that the operating budget as a whole will breach $1 billion by 2007, including a staggering $304 million in debt service. Forget world-class city, Charlotte will be a billion-dollar baby for just day-to-day operations of the city.

Even so, a handful of savings proposals are already on the table. The primary spending reductions the budget contemplates center around reducing the frequency of garbage pick-up at apartment complexes and ending landscaping and litter-patrol efforts on state-owned streets and medians, which would save about $1.5 million over the next two years.

But as welcome as that might be, it must be balanced against the $1.2 million in new spending proposed to pay overtime to police officers for uptown traffic control, primarily the result of the opening of the city’s new uptown arena in the fall. In addition, $1.1 million has been requested to support garbage collection service for newly annexed areas, which raises the question of why these the areas were annexed at all if they were going to cost the city more money.

Most curious is the $78,000 requested for a Senior Economic Development Specialist who will work to bring development projects to the light rail stations planned for South Corridor rail line. Despite everything the public has been told by city officials over the years, Charlotte’s light rail line must not, in fact, be an economic development engine that knows no bounds, it still needs to be sold and hyped just like the rest of the city.

This is also a concrete example of the half-cent transit sales tax failing to pay for all of the costs associated with the light rail line, much like the millions of dollars in roadway spending associated with the transit stations themselves. Moreover, where there is an economic development specialist there is the risk of future city “incentive” give-ways to developers. Bottom-line, this is yet another non-core expenditure with potential to spin off new costs far, far into the future.

As a result of these kinds of spending proposals throughout the budget, the city council faces a very clear choice in the coming weeks. It can turn to tax hikes as a first resort to continue some ill-conceived and frankly unsustainable spending habits, or it can move to purposely cut the flab from Charlotte’s budget before chronic obesity sets in.