“Would you rather be shot and executed that way or hung?”
That was how one Carroll County supervisor described the two scenarios board members faced Monday night in approving a county budget with a tax increase. After a nearly 30-minute discussion, the board voted to approve a two cent increase to the existing real estate tax rate of 66 cents per $100 of assessed valuation, bringing the new tax rate to 68 cents. By choosing that option, the board voted against raising the real estate tax levy by one cent and increasing the county’s personal property tax rate by 15 cents as was originally presented.
The vote came two weeks after Carroll County Commissioner of the Revenue Fran McPherson told the board raising the personal property tax by the advertised proposal of 35 cents could raise the amount some taxpayers pay by as much as 50 percent on vehicles when the Governor’s Assistance Fund is factored in. Board Chairman Joshua Hendrick opened the floor to discussion on a two cent real estate tax hike or a one cent real estate tax increase with a 15 cent personal property tax increase.
“My opinion for what it is worth, the increase in personal property tax, 15 cents would cause a general increase to tax tickets greatly above that due to the decrease in the Governor’s Assistance Fund,” Hendrick said. “I think it would be less burdensome to do two cents on real estate.”
Supervisor Phil McCraw noted the board dropped the real estate tax levy from 68 cents to 66 cents the previous year. In retrospect, he said maybe that was a mistake. But he noted approving a two cent tax hike would put Carroll’s rate back to where it was two years ago.
“Would you rather be shot and executed that way or hung? The bottom line is you are dead either way,” Supervisor Bob Martin said. “There are not any good choices.”
Martin then made a motion to approve and appropriate Carroll County General operating total expenditures of $41,174,312 for the general fund, and $3,000 for the Law Library fund.
“That motion I make is for two cents increase on real estate and zero on personal property taxes,” Martin said before adding for his motion to include the previously adopted school budget of $42,596,998 for a total general county operating fund budget $83,776,310. Martin’s motion included leaving alone all the other existing county tax rates – $1.95 per $100 of assessed valuation of personal property, 69 cents for merchant’s capital, and $1.75 for machinery and tools.
After a long pause of more than a minute, Martin’s motion did not receive a second. At that point, Martin’s motion failed 3-2 with Rex Hill, Robbie McCraw and Phil McCraw casting the no votes. Martin and Hendrick voted yes and Supervisor Dr. Tom Littrell was not in attendance due to a prior commitment.
“Alright gentlemen, we are going to have to pass a budget tonight,” Phil McCraw said. “I am just going to be bluntly honest. I don’t think anyone, even the two gentlemen that voted yes, none of us want a tax increase. But sadly enough it looks like we are going to have to do something.”
Hendrick said he didn’t have a problem voting for a tax increase because when he campaigned in 2011 he said the county would face a budget crunch in five years. Everybody knew it was coming, he said, because of the debt the county piled up.
“This started back 10 years ago and all the debt is hitting now,” Hendrick said. “It’s not just QSCB (a $15 million loan for the renovation of Carroll County’s high school and middle school). It’s not just PSA, it’s not any one particular thing, it’s all the debt combined. We are still paying on the county complex.”
Robbie McCraw said he has made it known he does not agree with a real estate tax increase. He said he believed in increasing the personal property taxes because he felt it was more fair to hit everybody instead of just property owners.
“Real estate property owners are carrying the burden here. I just feel like it ought to hit personal property and that is my opinion,” he said. “I just don’t feel like it is right to do it all on real estate and I just don’t feel like I can with a clear conscious vote for anything with a real estate increase on it.”
At that point, Phil McCraw asked if it was too late for him to change his vote. Hendrick said since he was on the opposing side, he could bring up the same motion Martin originally made. McCraw said he would bring up the same motion reluctantly, adding there were no winners. Everyone else voted the same as they did the first time, but Phil McCraw changed his vote, meaning the motion for a two cent real estate tax increase would pass by a 3-2 vote.
“I am going to vote yes but I am going to say why. I voted no the first time and I asked to have it brought back up. We can sit here all night. I don’t want a tax increase. I can’t afford a tax increase,” he said. “I have got crippled up, not able to work, and physically I’m probably 20 percent of what I was five years ago if that much. Like everyone else I am hurting. But sadly enough it’s time to pay the piper. There have been things that have happened in Carroll over the course of several years that we will have to continue to pay for. But I don’t want a tax increase.”
One of those things, Martin added, was the $15 million QSCB loan for school renovations. Hendrick said that is a big part of the county’s financial situation, but not all of it.
“There has been progress, projects in the county that cost money. The decisions that were made were to acquire debt. This is the end result,” Hendrick said. “The services we provide as a county, that includes debt services for facilities or whatever and that comes at a price. Some of these items have deferred payments. Now all of those payments are active. Last year was the first QSCB payment and it was earmarked in fund balance, which meant in order to balance last year’s budget, the additional $1.5 million for QSCB was taken out of our savings account and used to balance the budget. We would have had the same discussion last year if we hadn’t had enough surplus to do it. The discussion is no different (this year), we are just not using surplus. But there will not be major changes I foresee for the next five years. Major debt does not start rolling off the books until 2021 and 2022.”
Martin said the positive part is the county has things in place that could generate revenue such as water, sewer, and natural gas at industrial sites near Interstate 77. He said there are a lot of school systems that would love to be in Carroll’s situation.
“The boards for several boards worked with the school board and we built and renovated schools at a very reasonable price and we got them in place. Yeah, we have to pay for them, but we got some really nifty prices and we got things in place that who knows, there may be an industry tomorrow,” he said.
Hendrick noted that is the challenge with economic development. Folks in the business for 30 years will tell you sometimes you build it and they come tomorrow. Sometimes you build it and they come in 20 years.
“And there is no way to know and Bob is right. The positive is we have facilities that are ready to go,” Hendrick said. “Now the challenge is putting buildings on sites and people in the buildings.”
Phil McCraw said he has been blessed to be on the board for five years without having to raise taxes until this year.
“I am not going to try to justify it because I don’t like it any better than anyone else. But I voted no the first time. I didn’t want to vote yes and I still don’t,” he said. “But the handwriting is on the wall and I felt like after the first vote one of us would have to step up and do the unpopular thing, so I did it. Now I have to go home and face the music. I didn’t like it but it had to be done.”
Allen Worrell can be reached at (276) 779-4062 or on [email protected]