Opinion: Daily Journal

Targeting Tax Cuts — By Race

RALEIGH — This is one of those stories that you could make up, if you were seeking to invent the most ridiculous example of leftist lawyers run amok just so you could rhetorically pummel it into a pulp.

Thanks to Chapel Hill lawyer and leftist gadfly Al McSurely, however, I’ve got it easy today. He has managed to bring to real life perhaps the most fanciful and outrageous legal claim I or any one could possibly have imagined. All that’s left for me to do is throw a few gratuitous punches.

McSurely, whom I have only met a couple of times but whose legal career on behalf of disadvantaged clients is locally legendary, has a penchant for over-selling and politicizing his cases. In one recent example, he took up the case of several black employees of the N.C. Department of Transportation who said they were the victims of racists creating a hostile work environment. The prime evidence was the existence of a noose hanging over their work area, the implication being obvious.

I had the occasion to interview McSurely about the DOT case a few months ago during a segment on “At Issue,” a weekly program produced by the Triangle’s NBC affiliate, WNCN-TV. Rather than sticking to the facts of his case — which I did, by the way, consider compelling enough to merit further investigation — McSurely launched into a tirade about the Bush administration, of all things, despite the fact that the state DOT is run by Democrats and bears no political or policy relationship to the president’s policies on race or anything else. When I confronted him in mid-silly-sentence, McSurely seemed shocked, as if it were perfectly rational to turn a legitimate grievance into an excuse for spouting pointless and mean-spirited propaganda.

When I read about his latest cause in The News & Observer of Raleigh Thursday, the situation sure sounded familiar. Here was a set of African-American clients who may well have a legitimate grievance and who need competent legal representation. Here was McSurely pontificating about America’s racist past and bloviating about his own ideological refraction of the constitution. Here was, in short, a travesty.

The facts of the case are these. The Battle family have lived in Chapel Hill for generations, descended from the slaves of a former UNC-Chapel Hill president. In 1933, Ivey Battle bought a home on Hillsborough Street. Over the years, the Battle’s modest home has grown in value along with the rest of the downtown property of the town. By 1997, it was valued at about $150,000. Just five years later, due to a even-more-brisk market for real estate, the town of Chapel Hill valued the property at nearly $280,000 — and socked the late Mr. Battle’s widow with an eye-popping tax bill of $4,670.

This is, it should be said, a real problem that deserves serious attention. Property taxes are useful devices for linking the value of local government services with the revenues needed to finance them. Much of what municipalities do is valuable to residents in proportion to how much real property they own in the town — and how much it is worth. But this system breaks down when property values detach themselves from any meaningful relationship to income. After all, all taxes are really income taxes. You don’t pay your property tax by chiseling off pieces of your house and throwing them at the tax collector, no matter how tempting that might be. You pay all taxes by earning and then spending cash income. When retirees receiving only inflation-adjusted income see their home prices soar far faster than inflation, the result can be personally and politically disastrous.

McSurely argues that rapid escalations of the property-tax burden in downtown Chapel Hill are having a disproportionate impact on lower-income folks and minorities, and he may be right. Unfortunately, the policy he chose to advocate in his challenge of the Battles’ tax bill is that blacks be given preferential treatment in property-tax cases because of historical discrimination. That is, he argues that the current system is “too mechanical” and fails to take into account the Battles’ personal situation and “why black people have no capital.”

Fred Battle, the son who serves as president of the Chapel Hill-Carrboro NAACP and who apparently sought McSurely’s aid in the matter, seems to have a clearer understanding of the principles involved. “”We’re not asking for preferential treatment. We’re not asking to be overtaxed either,” he told the newspaper. “I shouldn’t have to be forced to sell the property my parents obtained by the sweat of their bones.”

Right. No one, white or black, should face such a crushing burden of taxation that the only recourse is to sell. We need to rethink how we levy property taxes. One idea I like would be to conduct more frequent revaluations — so that there aren’t huge spikes in value or big tax-rate increases — but also to impose an annual cap on property-tax bills so that they cannot grow faster than the general inflation rate. Another idea would be to further expand the state’s homestead exemption — property-tax exclusions available to retirees and the disabled. Perhaps in some cases we ought simply to abandon property taxes as a funding stream.

By all means, North Carolinians and their leaders should be debating this important matter. McSurely’s ridiculous legal claim isn’t going to help, however. There’s no reason to import extraneous issues or try to smuggle slavery reparations into a tax dispute. Unless, of course, the real purpose of the exercise is not to facilitate but to bloviate.

Hood is president of the John Locke Foundation and publisher of Carolina Journal.