Food for Thought Regarding Tax Increases

On May 6, Rockingham County voters overwhelmingly rejected the proposed sales tax increase despite an active campaign by its proponents, including the vast majority of our county's elected officials. I believe this following information, copied from a follow-up newsletter by Chad Adams of the Center for Local Innovation, is well stated and should be food for thought for everyone involved. Here is that text:

As the various tax initiatives are analyzed, neither government nor Chamber of Commerce officials will be quick to recognize that citizens are simply sick of taxes. This election had low Republican and high Democratic turnout, and still 22 of 24 tax initiatives failed.

In response, many county officials have threatened property tax increases in order to pay for such things as schools. In this election cycle, it would be wise for them to reconsider.

The reasons for the tax-initiative failures are widespread. Food and gas prices are high, both the sales and property taxes proposed are regressive, and folks are realizing that local government growing expenditures faster than they can gain revenue isn't good policy.

What we should learn from this is that local governments need to go back and look at school budgets more closely. Citizens are beginning to realize that school boards are increasingly wasteful in their spending and do so without accountability. With 30 percent dropout rates, wasted money, expansion budgets funded with continuation funds, and fund balances that are loosely followed and not even required by law, commissioners and local papers should be asking tougher questions and demanding more accountability.

Chambers of Commerce and newspapers should push for citizen advisory groups to come together and truly come up with a plan that includes the broad spectrum of political and fiscal ideology. More often than not, conservative voices in these referenda are simply ignored, as Chambers spend tens of thousands of dollars to promote increasing taxes that are not in the interest of local businesses.

If we can start to address what governments should be doing instead of what special interests want them to do, we may well find that local government is actually affordable. Furthermore, we might actually solve some community and educational problems, instead of simply throwing our hard earned money away thinking things will get better.

Well stated, Mr. Adams.

Less Government Spending, Not More Taxes

Through submitted editorials, taxpayer-funded brochures, news reports, etc., many citizens are aware that the majority of their commissioners are in favor of increasing the sales tax. I understand the arguments, and appreciate quality school buildings as much as anyone. Good people are on both sides of this controversial issue, because we differ in the details to best achieve that goal.

I did not run for commissioner to be a lobbyist for tax increases, or to use tax dollars and county employees to promote that effort. I am personally embarrassed for the board because of these tactics.

While I may have often stood alone on our board, I stand with those that believe government has grown too much at all levels. With the unnecessary growth and spending of government, we could have instead further addressed such real needs of school buildings and a new courthouse and jail. Because government growth has not been curbed, the county is about to incur huge debts trying to catch up with all these needs at one time. Some of us believe that our citizens cannot afford it, and that higher taxes hurt the economy.

It is bad policy to tie education to this sales tax increase for both moral and economic reasons. Our county could meet its obligations if the role of government was scaled back toward its original intent enough to make more room for families, neighbors, businesses, churches, charities, non-profits, civic organizations, and all the important institutions that build a healthy community. Big government is not solving the breakdown of the family; it is promoting it.

When this new tax passes "for schools", it will free up more government tax money to spend in other ways. Rest assured that more property tax increases are on the way, regardless whether this new sales tax passes. Current projections are already looking to next year's revaluation and future tax increases to pay the bills. My motion to the board, to offset just half of the first year's sales tax increase with a small property tax decrease and lower discretionary government spending, died for lack of a seconding motion. The school money would have still been there, but other discretionary spending would have been reduced (by less than one percent of the county budget). It seems a false promise to say this is all about schools.

Indeed some feel that the need for four new school buildings immediately is more important than curbing discretionary government spending to pay for the debt to build them, so more tax money is needed. With Phases 1 and 2 of school constructions and renovations now completed (11 schools, $87 million), Phase 3 now includes at least 12 more schools projected at $129 million (these 2005 figures are the latest I've received to date). These first four schools on the list will cost about $60 million, according to the latest figure given. The new sales tax is projected to raise $1.6 million per year. The proponents say the additional tax is critical.

But, many believe that continuing to raise taxes has also hurt our need to recruit or retain much needed businesses and jobs (and taxpayers). Since 1990, our state has grown in number by 40 percent. The county population is up only about eight percent during that time, not even keeping up with the birth rate. Meanwhile the county government budget has grown 247% (while inflation grew 65%). Clearly government has grown, but the local economy has not.

Exercise your right to vote on May 6. If you believe more tax money is needed for government services, or that the new tax is critical for education regardless, then vote for it. If you think reducing and prioritizing government spending makes more sense, then vote against the higher tax. At least you have a few more of the facts.

I Will Not Seek Re-Election in November

Here is a copy of my official media statement on not seeking re-election.

Rockingham County Board of Commissioners Chairman Bert Jones confirmed today that he will not seek re-election to another term this November, citing both personal and political reasons. Jones said he wanted to spend more time with his family, and other priorities in his life, including Christian service.

As for the politics, he stated, "it has been difficult and often pretty lonely working to hold the line on taxing and spending. I'm very concerned for our county. Particularly businesses, and people like seniors on fixed incomes, middle-income homeowners, or potential first-time homebuyers, are being hit very hard. I'm concerned it will worsen because our budgeting policies are not sustainable."

Jones also said that "many people have gotten used to the expanded roles of government, and there is a lot of pressure for it to take over and try to solve every problem, including those it helped to cause." Jones said this has come at the great expense of families, businesses, volunteerism, and the culture in general, adding, "It's not working. I believe we have some very challenging times ahead. Eventually, some very difficult and unpopular decisions are going to have to be made, not just at the county level, but particularly at the national and state levels."

Jones added, "I really appreciate the people of the county giving me the opportunity to serve. I've tried to be a reasonable voice for our taxpayers, and a good steward for our citizens. Hopefully I've been able to contribute something and make a positive difference."

Response to newspaper regarding my current plans not to seek another term next year

Recently I submitted a column to the local newspapers in which I mentioned that my current plans are not to run for another term as county commissioner. The following is the brief letter I wrote in response to their question to me of why. Some of my comments below were quoted in a later article they published on the subject.

Here is the complete text of my letter:

I expect to issue an official statement closer to the filing date early next year, but I'll try to briefly address your question. Presently, my intention is not to run for another term next year.

My reasons are really more personal than political. My priorities are my faith in Christ and my family, in that order. Life is short, and I want to further concentrate my time in these interests that I believe will count for eternity.

My interest in government is to limit its power and authority to what I believe is its biblical standard. In my opinion, it has become too big, too powerful, too costly, and too corrupt at the federal and state levels. The intrusion of big government has caused the institution of the family to suffer greatly, as all the issues and statistics clearly indicate. Counties largely have their hands tied, but commissioners can play an important role in controlling the size, scope, and cost of local government to a degree.

I do believe Rockingham County citizens could enjoy a better quality of life if things were structured for less dependence on government, more emphasis on family and community, and a better tax environment for businesses and homeowners. We're clearly losing too many people and too many jobs. I disagree with those that believe more government taxing and spending will improve quality of life, but most elected officials don't share my view enough to reverse the trend.

In my opinion, we need more "citizen statesmen" that return to full-time private life, and less career politicians. When people stay in office too long, it can cause them to lose the proper perspective. Too much power is not a good thing. We really need to find a way to limit the influence of power, money, and special interest groups in politics, but too many politicians enjoy the power. I don't want to fall in that trap, and to me four years at a time is still a long time.

I've been encouraged by many likeminded citizens, and I would encourage other such capable people to serve. Our county (as well as our state and nation) needs to slow down its spending before things get really worse, but that will require courageous leadership and tough decisions by a majority. Unfortunately, that prospect is diminishing as the number of taxpayers continues to decline relative to those becoming more dependent on government.

It's been a good experience, and I have no regrets. I like the people I've worked with, even though we sometimes disagree. I'll continue to pray about the decision to run and follow the Lord's leading.

Thank you for your concern. I hope this answers your question for now. Again, I'll plan to issue an official statement closer to the filing date.

Sincerely,

Bert Jones

The Taxpayers Lost Again

Well, another local budget is in the books. Sorry, taxpayers. You lost again.

No doubt many followed the news with interest, and wondered what vital government services might be "slashed" as the budget deadline drew near and the budget was not yet completed. But lest there be any doubt, "Uncle Sam" Claus rode in on his proverbial sleigh to save the day. Budget passed... taxes up again... sorry, taxpayers.

People often ask why their local tax bill has gone up so much. To the concerned homeowners, business owners, senior citizens, potential first-time homebuyers, and taxpayers in general – here it is in a nutshell. Twenty years ago, relative to today, our county was thriving. Major businesses provided more jobs and bolstered a more robust economy. In the 1990's, as many began to close up or move out, local government (as well as the state and federal government) continued to grow in size and scope. The economy dropped. Although government growth has slowed down in recent years, there has certainly been no reduction in the scope, size, or cost of government. So now, homeowners and small businesses pay more... a lot more.

There is no "free lunch". A richer level of government services means higher tax rates. People have to decide, "How much is too much?" Rockingham County has opted not to reduce its services, although the county had established a relatively rich level of services back in the days of a better economy. By a "relatively rich" level, we mean that our county provides some services to a greater degree than some other counties (including some that have more ability to pay). But, that's a choice each community has to make.

So, how are we doing? Well, it probably depends on who you are. But, objectively, as a county, there may be cause for concern, putting it mildly. The problem is that someone has to pay the bills. While our state is experiencing robust growth, our county growth is almost zero since 1990 (less than 1/2% per year). Meanwhile, the county government budget during that time has almost doubled in constant dollars. (Constant dollars take inflation into account. The Consumer Price Index is up 57% since 1990, but the county budget has almost tripled.) Part of the problem lies with unfunded mandates from the expanding federal and state governments. Also, government spending for public schools has skyrocketed (see below). Another major problem is Medicaid. North Carolina is the only state in the country that makes county taxes pay for Medicaid, so relatively poorer counties pay more. But part of the problem also lies with increased local discretionary spending, and a desire for that "relatively rich" level of government services.

So, what has happened lately since government growth has "slowed down"? After all, in the 1990's, Rockingham County government had years of 15% growth or more. This year, it was only about 3%. It was my third budget year on the board (and my third vote against the budget increases). Two years ago, the county didn't raise taxes, but spent more than $3 million out of the emergency reserve fund (equivalent to about six cents on the tax rate). Last year, the county raised the tax rate by five cents.

This year, another three-cent tax increase was proposed. I announced in the beginning that I would not support it. For three years, I've offered what I felt were necessary alternatives to tax and spend increases if the county situation is to improve. Commissioner Isley announced weeks ago that he would not support the tax increase either. Meanwhile, the majority felt they had three votes until they were surprised when the vote happened. And so, everyone was scrambling in the final days to pass a budget.

The majority couldn't agree how much to raise taxes, but had offered no ideas or alternatives to get to three votes for something. Meanwhile, I offered a possible scenario to balance the budget without a tax increase, and with relatively minimal effect on county jobs, by the manager's admission in the meeting. The budget would have still been about 1½% more than last year. I could have done a much better job if the majority had wanted to consider reductions at an earlier date, but at this point someone had to offer something to pass a budget.

In the end, the majority agreed on about $300,000 in reductions to the $91 million proposed budget, which is less than one-third of one percent. (That was the "slash", as the budget still increased by about three percent over last year.) Meanwhile, the majority voted to take more than a quarter million dollars from the emergency reserves for operating expenses to balance the budget with a two-cent tax increase. (That money from the fund balance represents almost another half-cent on the tax rate.)

So, in three years, the county tax rate has gone up seven cents, more than 10% to 70.5 cents. In addition, the fund balance decreased by well over $3 million (worth another six cents on the tax rate). Plus, we're about to take on the largest debt in county history, for a courthouse that we have no choice but to build... a courthouse that would have cost less than half a few years ago when county government spending was growing 15% a year. And these have been the so-called "tight budget years".

A couple points of clarification are in order to address reports that those mean Commissioners Jones and Isley wanted to "slash" services – social services, public safety, public schools, and basically all things good.

The discussion on public schools was simply whether to increase county funding by either $500,000 or $600,000. County government provides about $16 million of the Rockingham County school system's annual operating budget of approximately $120 million. (This represents about 29 cents of tax rate to generate, as each cent generates about $573,000.) The $100,000 difference we were discussing amounts to less than 1/1000 of their operating budget, which is well over $8000 per pupil. It is notable that government spends more than triple (in constant dollars) per pupil than one generation ago, and more than seven times per pupil than two generations ago. Having great respect for quality education and educators, I know many that agree that "money is not the answer".

Without going into detail, other discussed items were slight reductions in the increases – no cuts. The proposed budget increased public safety by 5.7%; we considered no less than a 4.5% increase. To put that in perspective, a 5.7% increase on the entire budget would mean nine cents on the tax rate. Commissioner Isley and I felt obligated to the taxpayers of the county to consider these discussions, even as we were painted by some as villains for doing so.

I plan on retiring from the board next year, and wish all the best to my successors. I'm no politician, but I have served as a duty to try to address the county's unenviable situation. I regret that the next board will inherit an escalating problem, but one vote and one voice is not enough. For years I've heard leaders be "hopeful" that things will turn around. It seems government cannot buy enough jobs through the front door to replenish the economy lost by those leaving out the back door and the windows. As one taxpaying business owner reminded me recently, they do have a choice about where to locate, and they'll go where overhead expenses are more reasonable. In a world where government scope and power continues to grow, the taxpayers do still have that choice. And, the reality is that tomorrow's taxpayers, the graduates looking for good jobs, will continue to flock toward opportunity, not government dependence.

The taxpayers are always the villains at budget time, but the heroes when the tax payments come in. Yes, the taxpayers lost again. But long live the taxpayers!

Commissioner Jones Will Oppose Tax Increase

Rockingham County Commissioner Bert Jones said Monday that he will oppose the proposed eight-cent property tax increase for the coming year. "I believe such a tax increase could really strain many businesses and homeowners trying to make ends meet," Jones said. "Higher property taxes also make the county less attractive for both new and existing businesses to create badly needed jobs in Rockingham County," he added.

Jones stated that he is very concerned about Rockingham County's ongoing economic difficulties, partly because neighboring Virginia has lower sales taxes, gas taxes, and income taxes, and many similar North Carolina counties have lower property taxes already. "Our economy here has truly suffered. In my opinion, a tax increase on our citizens is a step in the wrong direction. I cannot support it."

No Tax and Spend Increase is Necessary

I would like to share a few thoughts regarding the upcoming budget and the possible tax increases that have been mentioned by some. Such comments were the topic of local newspaper headlines this week. I have already heard from several upset citizens including small business owners, all of who are legitimately concerned about such a tax increase.

The April 19 newspaper article included some paraphrases of comments attributed to others. Such comments make it seem that a tax increase is imminent, and "the sooner the better". For the record, I certainly do not feel that way. Perhaps there is an assumption that we are unable to reduce the county budget, even aside from the courthouse and jail. I do not share that assumption.

I find it remarkable that the Board of Commissioners heard two presentations on the same day (April 18) - one presentation on performance based budgeting (a method that could be used to reduce the budget), and one presentation that (if tax increases are presumed) assumes we cannot (or will not) reduce the budget aside from the new capital projects.

As an aside, I have maintained all along that the expenses appropriated for consultants regarding "budgeting for outcomes" based on priorities are a waste of money if the commissioners are unwilling to make difficult budgeting decisions, including reductions or at least holding the line.

In 2002, Davidson County began using "Performance Based Budgeting". The process has reportedly been successful in improving their efficiency and effectiveness, and has saved the county millions of dollars. Apparently it has also been popular with some of their department heads that now have greater flexibility to run their department like a successful business. They can even offer financial incentives to employees that improve their performance, which often saves the county money. Such a system is not only cost saving for the county taxpayers, it is a morale booster for employees as well.

On April 18, Davidson County assistant manager Zeb Hanner graciously made an excellent presentation to our board about their experience with performance based budgeting. During his presentation, he noted that their budget is about $125 million for their population of approximately 153,000 people. (The Davidson County budget at their website shows $105 million, so perhaps he was including more funds, such as the mental health budget outside of county dollars, or other items not in the general budget, but I don't know.) However, even using his higher figures, that ratio of about $817 per capita compares very favorably to our budget. Such comparisons are consistent with other studies that I (and later the citizens' budget study task force) have pointed out before. In reviewing and comparing the budgets of some other North Carolina counties relatively similar in size to us, some of their per capita budgets were even lower than Davidson. Rockingham County's budget of $94 million for less than 93,000 people is over $1000 per person.

Such comparisons always invite the questions about whether we are comparing "apples to apples", so I went to their website and downloaded their budget totals to compare to ours. Our practice of including the mental health budget is generally cited as the major factor of why our budget figures are different from some, so I compensated for that.

Not including the mental health budget outside of county dollars, here are the comparative figures. Rockingham County (population 92,118) spends $80,627,889, or $875.27 per capita. Davidson County (population 153,264) spends $105,671,881, or $629.48 per capita. For good measure, I included Randolph County (population 135,805), which spends $96,264,289 or $708.84 per capita. These counties should be considered as fair as possible for comparison, considering their relative approximate size and location (border counties of the larger, more urban Guilford and Forsyth) in the Piedmont Triad. All are populated with smaller towns and cities and more rural areas. (Davidson County has Lexington and Thomasville, Randolph County has Asheboro and several smaller communities.) All have been hit hard economically with the hit on the local textile, tobacco, and furniture industries. No comparison is perfect, but I think the disparities in per capita spending suggest that these are two examples of counties that have been more conservative minded with their budgeting over the years.

I think these spending figures stress the point that it should not be impossible to consider a relatively small decrease in the Rockingham budget that could more than compensate for funding the needed capital projects without a tax increase.

I will not personally support another spending increase such as last year's, which passed 4-1 with me casting the lone dissenting vote. However, let me at least again suggest that the board should pay for the budget without raiding the emergency reserve fund balance to cover operating expenses as it did last year. Partly because last year emergency reserves were budgeted for operating expenses, apparently those reserves have decreased substantially according to the latest report. We cannot afford to continue to have our emergency reserve fund used for annual operating expenses. If it is not otherwise depleted with unnecessary expenses, we certainly could use a small portion of that fund to help pay for the courthouse and jail payments at first while we are implementing a performance based budgeting system that will ultimately provide savings we very much need.

Although I certainly support the necessity of building the courthouse and jail, I do think the size and scope of the courthouse building remains an issue. I noted that the current space projections from the architects are at least 11,000 sq. ft. (and up) more than the courthouse consultant's earlier projections. I hope that we will thoroughly investigate the size needs of departmental offices and compare them to other county courthouses, including ones we visited. We also need to consider the relative costs and necessity of incorporating each office considered to possibly be in the new courthouse. I certainly believe that affordability is a central issue, particularly in light of other county needs as well. From the beginning I stated concerns because our courthouse committee is primarily a "user" dominated group, rather than a taxpayer-dominated group. I certainly respect the government officials and employees that will be housed in the courthouse offices, and their suggestions are indeed very important. However, it certainly makes economic sense that other factors (such as comparative office buildings and affordability) strongly influence the final courthouse design. I think that Harnett County's use of separate "user" and "taxpayer representative" committees when they built their courthouse recently (one that we visited) was a good idea.

To summarize my position on the proposed tax increase and spending increase, I believe that we could hold the line on taxes if we were willing to hold the line on overall spending. We could incorporate the first year of courthouse/jail complex payments if we would reduce the rest of the county budget by less than one percent. Catawba County reduced their overall budget by 6% the first year they incorporated the Performance Based Budgeting system. As stated, Davidson County reports that they have saved millions of dollars as well. I believe that over the next few years, we should be able to identify savings in other areas that could offset the courthouse expenses.