Call for Sales Tax Highlights Guilford Spending Missteps

Sam A. Hieb

October 8, 2010

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This week’s “Daily Journal” guest columnist is Sam Hieb, a Carolina Journal contributor who blogs for Piedmont Publius.

At a special meeting in August, the Guilford County Board of Commissioners put a quarter-cent sales tax increase on the November ballot.

Commissioners evidently don’t understand the meaning of the word “no,” because Guilford voters twice defeated the sales tax in 2008, once during the May primary and again in the November general election. But it’s not is if voters aren’t culpable, either. Along with the sales tax referendum, more than a half-billion dollars in bonds were on the ballot in ’08, including $412 million in school bonds.

Commissioners like to remind voters of this fact. In a recent Greensboro News & Record article, commission chairman Skip Alston was quoted as saying “we need [voters’] help to pay for that increased debt they voted for in 2008, so we won’t have to put all this debt again on the backs of the property owners.”

The idea that voters approved debt with the understanding that commissioners would raise taxes to service it if necessary doesn’t really stand up when you look at the circumstances surrounding Guilford’s rising indebtedness.

Look west to Watauga County, where voters overwhelmingly rejected a quarter-cent sales tax hike.

Watauga commissioners claimed that the sales tax revenue would go toward “recreation facilities,” but John Locke Foundation analysts pointed at the new $79 million Watauga High School as the main reason for the sales tax increase.

In their study, aptly titled “Boone-Doggle,” authors Joseph Coletti, Terry Stoops, and Michael Sanera pointed out that excessive spending on the new school caused county commissioners to shortchange school facilities in 2006 by $20 million, “leaving other new school and renovation needs unmet.”

The report also points out that commissioners could use the new sales tax revenue for any legal purpose, “including paying debt service on the new school” — which, by the way, is “the most expensive school ever built in the state.”

Expensive schools are at the heart of Guilford’s debt problems, too. In fairness, it should be noted that Watauga commissioners approved the new school without the consent of voters, whereas debt for new schools in Guilford had been approved by voters not once but twice over the last 10 years. But that’s a big part of the story.

Voters approved a $300 million school bond in 2003, but overspending on certain projects — including the “green” Northern Guilford Middle School — exhausted funds for a new Jamestown Middle School. The middle school was the main selling point for the bond referendum.

After mismanaging the 2003 bond, the Jamestown project reappeared on the $412 million bond put before voters in 2008.

Spending on projects approved in 2008 appears to be excessive, too. Major renovations to Ragsdale High School — merging it with the old Jamestown Middle School — have come in $5 million over budget. A new high school close to Piedmont Triad International Airport originally was estimated to cost $88 million, which at the time would have been the most expensive high school ever built in North Carolina. The cost since has been scaled back to $72 million, or not much less than Watauga’s gold-plated new high school.

Again, let’s be fair. Guilford’s debt also is driven by a new, $115 million jail approved by voters in another bond referendum on the ’08 ballot. Also on that ballot was a separate $45 million school bond to rebuild Eastern Guilford High School after it was destroyed by fire.

At the risk of sounding like county commissioners, voters should realize that when they approve debt, the bill eventually comes due. And the bill will come due big time as the county’s debt will reach a staggering $1 billion during the 2011-12 fiscal year.

But when voters approve debt, officials have to manage that debt responsibly. That’s not necessarily the case here in Guilford. With that in mind, Guilford voters should send commissioners the same message Watauga voters sent their leaders: Enough is enough. No more gimmicks to deal with debt.

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