Click here to view and here to listen to Michael Lowrey discussing this report.
RALEIGH — Local taxes and fees topped $2,303 per person in Chapel Hill during the 2011 budget year, as the Orange County town maintained its No. 2 rank among North Carolina’s largest municipalities in per capita local government costs. Cary jumped ahead of Raleigh on the list, and Wake County’s two largest communities ranked in the top 10 statewide.
Cary ($1,900) moved up seven spots to rank No. 9 in the John Locke Foundation’s annual ranking of North Carolina’s local tax-and-fee burdens. Raleigh ($1,892) dropped one spot to No. 10.
Durham ($2,067) climbed one spot to No. 5. Wake Forest ($1,852) dropped three spots to No. 13. Garner ($1,812) climbed two spots to No. 17, while Apex ($1,663) dropped two spots to No. 22.
Mooresville ended Charlotte’s 11-year run at the top of the statewide rankings. The Queen City dropped to No. 3, while Wilmington ranked No. 4. The list compared 34 municipalities with at least 25,000 residents. Jacksonville, Indian Trail, Thomasville, Asheboro, and Goldsboro ranked lowest among the larger cities.
Among North Carolina’s 92 ranked medium-sized municipalities, eight Triangle-area communities ranked among the state’s top 25 for their rates of local revenues per person: Hillsborough ($2,393), Carrboro ($2,170), Morrisville ($2,033), Smithfield ($1,901), Holly Springs ($1,894), Knightdale ($1,753), Siler City ($1,739), and Fuquay-Varina ($1,728).
Other area municipalities were closer to the state median, including Wendell ($1,661), Clayton ($1,615), Henderson ($1,499), Selma ($1,397), and Oxford ($1,382). Butner ($994) places No. 88 among the 92 ranked municipalities in this group. Roxboro is unranked for a second straight year because of incomplete data.
Durham (5.86 percent) County moves up three spots to No. 6 when counties are ranked by the tax-and-fee burden as a share of personal income. Wake (4.60 percent) ranks No. 27, while Orange (4.60 percent) ranks No. 28. Most other area counties ranked closer to the state median of 4.15 percent. That includes Vance (4.33 percent), Franklin (3.82 percent), Johnston (3.80 percent), and Person (3.50 percent). Granville (3.42 percent) and Chatham (3.30 percent) ranked among the 25 counties with the lowest per person tax burdens.
By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2011 is the 15th such report published by the John Locke Foundation. Lowrey used the most recent data available from the State Treasurer, Bureau of Labor Statistics, and Bureau of Economic Analysis to construct rankings of local government cost on a per-person basis. For counties, he also constructed rankings on a share-of-income basis.
Lowrey continues to highlight a continuing problem that helps skew data. Four counties and nearly 40 municipalities missed state deadlines to file their State Treasurer’s Annual Financial Information Report.
“Whether those local governments filed the statements after the deadline or not, the information still is not available from the treasurer’s office,” Lowrey explained. “Without those reports, By The Numbers cannot include local tax burdens for those communities. Complete reporting would result in a somewhat higher combined county municipal median tax burden.”
Lowrey also repeated his annual warning against comparing the relatively high per-capita tax numbers in resort communities to those in other N.C. cities. Communities with larger numbers of second homes and resorts — combined with small year-round populations — will see larger per-capita tax burden figures, he said.
Among the 10 most populous counties, Durham (5.86 percent), Mecklenburg (5.31 percent), Guilford (5.19 percent), New Hanover (5.12 percent), and Buncombe (4.75 percent) ranked among the top 25 N.C. counties in average cost of local government. Wake (4.60 percent), Gaston (4.56 percent), Forsyth (4.56 percent), and Union (4.22 percent) ranked near the middle of the pack. Cumberland (3.22 percent) ranked No. 85 of the 96 ranked counties.
North Carolina collected $21.9 billion in state tax and fee revenues from July 1, 2010, to June 30, 2011. That’s 6.3 percent of state residents’ personal income. Local governments collected an additional $15.2 billion in property, sales, and other taxes and fees. That’s another 4.4 percent of personal income.
“Combined, they represent a state and local tax and fee burden of 10.7 percent,” Lowrey said. “Federal collections raise the total tax burden on North Carolinians to approximately 27.3 percent of personal income, on average.”
Lowrey stresses that a high cost-of-government ranking in the By The Numbers report does not equal a judgment that a city or county is governed poorly.
“By The Numbers is a tool that represents factual data only, without editorial comment or bias,” Lowrey said. “The best way to compare your city or county to others is to find municipalities or counties of similar size and demographics.”
“This report helps taxpayers evaluate whether the services they receive from local government merit what they are paying for them,” he added. “We hope taxpayers will continue to ask about the proper role of local government and its relationship to the state. It’s important to keep these discussions alive and to ensure our local leaders remain accountable to taxpayers.”
The John Locke Foundation Policy Report, “By The Numbers: What Government Costs in North Carolina Cities and Counties FY 2011,” is available at the JLF website. For more information, please contact Michael Lowrey at (704) 569-4269 or mlowrey@infionline.net. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or mkokai@johnlocke.org.