More so than even a few months ago local taxpayers are staring down the possibility of multiple tax hikes this year. Both the city of Charlotte and Mecklenburg County are heading toward new revenue as the only possible solution to the fiscal problems they have created for themselves.
For city residents the twin threats to their wallets are familiar ones. The South Blvd. light rail line and a massive arts projects wish list show every sign of spiraling out of control. The $130 million arts program wish list, and its most recent addition the NASCAR hall of fame/museum, are now clearly on a path to claim money from every resident of Charlotte. Plans floated by a city arts task force to pay for the bundle with a surcharge on uptown parking or a special property tax assessment were met with a stern “no” from the powerful Center City Partners.
The group, a non-profit mix of downtown corporations and interests and government officials, played the fairness card, arguing that a tax specific to the center city would be too narrow a tax base for projects the entire region would enjoy. Funny, Center City’s emphasis on the wheres and hows and flow of revenue is never evident when the rest of the region is asked to fund projects which primarily benefit the center city. Indeed, as literally hundreds of millions of dollars in public funds is dedicated to uptown-centric projects like the new arena and a dubious light rail system the sudden pity party from the Center City group is quite amusing.
In addition, there can be no mistake that the arts package now under review would be a big boon to uptown which, at last check, is still home to Discovery Place and the area is already the front-runner for Charlotte’s entry into the NASCAR sweepstakes. However, unless city leaders buck this powerful lobby the uptown-specific taxes appear to be off the table. That would leave either a ticket or “amusement tax” of the kind many other jurisdictions levy on all entertainment venues, a further increase in the car-rental tax, or, incredibly, a general property tax increase on all city residents.
Inside of those general parameters there is also the strong possibility that the city will try to use the tax-increment financing mechanism voters approved in November to issue debt to pay for some of the projects. The NASCAR component especially seems to be ripe for this treatment, which would by-pass the need for a voter approval of the project by stipulating that the economic benefit of the project would pay for itself. Either that, or the tooth fairy will cover it.
On top of the arts package, the Charlotte Area Transit System has a new year cash dilemma. The Federal Transit Authority has made clear that the city alone will have to absorb the $38 million in construction cost increases for the South Blvd. line. CATS could try to pry more money out of the state, but that is unlikely, which leaves only a handful of ugly choices.
Vital bridges planned for the 10-mile run into Pineville could be dropped from the plan to save money. That would virtually guarantee even worse traffic tie-ups up and down South Blvd., defeating one supposed purpose of the $400 million project. Or the start date of the project could be pushed back even further into 2007, perhaps allowing half-cent sales tax collections to catch up to the overall cost. Or perhaps the city will decide to dip into general revenues to help pay for the project. Right now all that is certain is that both time and money are short.
Similarly, Mecklenburg County has to confront the fact that it raised sales taxes by $25 million in 2003 while cutting property taxes that year, but never really address an upward spending trajectory even while raising property taxes last year. Now with a Democratic county commission majority much more willing to raise property taxes in large chunks, all interest in actually reducing spending growth appears to have evaporated.
As a result, a $25 million increase in property taxes to “offset” the 2003 cut would appear to be the opening bid in the county’s tax hike free-for-all. Toss in persistent rumblings from Charlotte-Mecklenburg Schools that the system is under funded and 2005 is already shaping up as a memorable year for local taxpayers. Here’s hoping they long remember the local leaders who tossed fiscal responsibility aside.