Saturday, October 30, 2010

Property and Quarter-cent Sales Tax Math, by Scott Yost and Skip Alston: Did the News & Record Know?

As a rule of thumb,
a 1-cent increase in property tax in Guilford County
raises about $4 million in additional revenue,
and Alston said the estimated $12 million the sales tax
would raise equates to about 3 cents per $100 valuation on the property tax rate.

If the News & Record reports that "county officials" say property taxes need to rise 8 cents
for all the debt the County Commissioners want to borrow,
and 8 cents x $4 million = $32 million to "pay down the bond debt,"
and Guilford County's 2011 budget deficit looks to be about $73 million,
is the electorate not being told about a potential $41 million gap?

$73 million - $32 million = $41 million

$41 million divided by $4 million per 1 cent property tax increase = 10.25 cents

Therefore, he maintains,
a sales tax increase could keep the property tax down by 3 cents,
but that's assuming the commissioners don't just use the additional $12 million
for new spending
and raise property taxes as much as they would have
if the sales tax increase didn't pass.

Is the electorate not being properly informed about the quarter cent ballot measure?

Scott Yost

Could the 8 cent tax increase really be 18.25 cents,
when the rest of Guilford County's budget is taken into account?

Was the Greensboro News & Record aware of this tax discrepancy,
when it endorsed the quarter cent tax increase?

If Guilford County's news industry doesn’t report on the specifics of Guilford County finances,
how can the electorate correctly determine what to vote for?

Could Guilford County face a $73 million budget deficit in 2011/12?

Total Principal and Interest Due 2010/12...................$98,352,299
Total Principal and Interest Due 2010/11....................-$70,850,005
Additional Principal and Interest Outlay.....................= $27,502,294
Minus 2010/11 Fund excess surplus elimination........$36,695,976
Plus additional corrections costs for new jail................$9,000,000

Potential 2011/12 Budget Deficit...................................$73,198,270

Has the Greensboro News & Record, Yes Weekly,
the Rhino and other local media outlets
reported on what may be Guilford County’s 2011/12 Budget Deficit?

If Guilford County, North Carolina spent ~$53,161,224
more than received in tax and other revenues in FY 2009/10,
and plans to spend $36,695,976 more than expected income in FY 2010/11,
does the Greensboro News & Record’s Editorial Board believe the county
should borrow $191,400,000 more in FY 2010/11
and $155,930,000 more in FY 2011/12,
while drawing down $89,857,200 of savings in two years?

Source: Pages 18 and 198, Guilford County adopted FY 2010/11 Budget

No comments: