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Sunday, October 12, 2014

Tax Increase Bond Referendum in Mecklenburg County

Citynewswatch editorial focus:

County Commissioner Matthew Ridenhour wrote a compelling editorial to the Charlotte Observer regarding the upcoming bond referendum when voters will get to choose whether or not we have a .25% tax increase billed primarily to pay for certain pay raises for teachers and other Charlotte Mecklenburg School expenses, Central Piedmont Community College, Charlotte Mecklenburg Public Libaries, the Arts & Science Council and Charlotte Chamber.  As Ridenhour points out, there's no guarantee the money would be used that way even with the vague plan offered now.  

The proposed tax itself has been poorly explained.  There is no good plan for how the money would be distributed.  No guarantee that the taxes, once established, would be used for only that purpose.  No good plan for how to decide which teachers are deserving of what amount of money.  Ridenhour explains that none of the groups who would benefit from the tax were consulted in forming a plan.

This is another example of poor leadership, poor planning, and pandering to "for the children, because our teachers deserve it" in an effort to slap us all with more taxes.  It's another failure of local and state government.  

Yes, our children deserve a better education than the average they are receiving now.  Yes, there are many wonderful teachers who are long overdue for a raise.  We are losing good teachers and failing to attract good teachers because of low pay.  That's not an excuse to hike taxes again, drive business base and jobs into other areas and lower the available money and talent to sustain the education funds we have. 

The education and political leaders need to do what business and home owners do when revenue does not meet spending:  decrease spending and increase your efficiency.  Drive costs down.  Look at improvements within budgets.  Find ways to attract more revenue.  Most businesses don't have the luxury of simply pricing themselves higher, or they price themselves completely out of the market. Voters need to pay attention and require better planning and accountability. 

Ridenhour states "Some have also said that if we do not raise taxes now, we will never have this opportunity to do so again."  Citynewswatch editorial board suggests that raising taxes should not always be the proposed solution for every struggle that arises in governing.  In fact, raising taxes often makes the burden higher, leading to fewer jobs, less business, personal & property tax available, higher crime, and a cascade of problems to deal with.  We can't tax and spend our way out of effective leadership.  

Here is Commissioner Ridenhour's editorial from the Charlotte Observer in it's entirety (emphasis added):

Should voters support sales tax hike? NO

NO: It’s poorly planned and unsustainable in long run

By Matthew Ridenhour
Special to the Observer

Unfortunately, a plan devoid of vision and thoughtful consideration is exactly what is being presented to voters.

A good community plan would have the input of the full Board of County Commissioners, CMS, CPCC, the ASC, the Library, the Charlotte Chamber, the General Assembly, the city and towns and other community stakeholders. Not one of those groups was consulted before commissioners voted 5-4 to place the referendum on the ballot.

A good fiscal plan would ensure a reliable funding source for teacher salaries. Sales tax is more volatile than property taxes. We are not so far removed from the Great Recession that we have forgotten the impact it had on consumer spending. We will have another recession. Is it fiscally prudent to promise $28 million a year to teachers when a slowdown in the economy will mean we cannot fulfill those promises?

A good plan would not raise the sales tax, which is regressive. Regressive taxes disproportionately hurt the poor and middle class. When legislators ushered in tax reform, they expanded the tax base by taxing goods and services not previously taxed. People criticized that, saying the regressive nature of the sales tax would hurt the poor and middle class. If that criticism was true then, then it is true now.

A good strategic plan would be sustainable, with a clear understanding of the long-term effects on the community. Increasing the sales tax is a one-time means to address teacher pay. What happens in two or three years when teacher pay is an issue again? The sales tax will no longer be an option – we will already have exhausted it. We will be right back where we are right now. There has been no analysis on the impact to businesses and consumer purchasing habits. Will businesses source supplies outside of Mecklenburg? Will this drive consumers to make larger purchases outside of the county? We do not know, because there has been no independent study.

The right plan would address these concerns, but would also ensure the funds go to the stated organizations. This plan cannot do that. By law, this sales tax revenue cannot be restricted to a specific obligation. All it takes is a majority vote of the county commissioners and the funds would go to other areas. To those who think this could never happen, look no further than to Social Security, the Highway Trust Fund, or the N.C. Education Lottery.

It is understandable that the organizations which would benefit from the sales tax have spoken out in favor of it. I do not think that this is the right tool for the job, though. The right tool is one which is fiscally responsible, sustainable and has broad community support. The right plan is to increase teacher supplements through our property tax revenue. We want to recruit and retain the best teachers out there – on that we all agree – and I believe we can do that. We will do that. It takes the right plan – not the one being presented to voters next month.

Matthew Ridenhour is a Republican Mecklenburg County commissioner.

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