The economic recession that hit full force in 2008 was declared officially over in June 2009 when the country experienced two quarters of very slow growth. But a troubled housing sector and a still-sluggish economy with high unemployment have contributed to the fiscal crises facing many cities and counties in North Carolina. As always, this edition of By the Numbers (BTN) is must reading for government officials and taxpayers alike. It highlights what kinds of fiscal problems face local governments in an economy that grows only very slowly. With the facts given here, county commissioners and city council members can easily compare their area’s tax burden to similarly situated cities or counties. For taxpayers, BTN is a starting point for questions about taxes and spending, enabling them to hold their elected and appointed officials accountable. This year, as in previous years, policy analyst Michael Lowrey continues the meticulous data collection and reporting that make BTN an essential touchstone for discussions of city and county finances in North Carolina.
As always, readers should consider the numbers presented here in context. Cities and counties differ in many ways, making cross-comparisons tricky. For example, not all cities provide solid waste service, recreation facilities, or convention centers. In addition, property tax revenue bases differ. Some coastal and mountain cities and counties have large numbers of part-time residents with seasonal homes; they are not counted in the population figures, but they still pay property taxes. The differences matter, so we recom- mend that readers make comparisons with cities and counties with similar demographics.
There is no doubt that the recession has reduced local revenues. Its impact continues to be reflected in the period covered in this report, Fiscal Year 2010. The median county revenue per capita was down slightly from an inflation-adjusted $1,304 to $1,242 per capita. That figure represents a significant burden for a family of four of $4,970, especially given the high levels of state and federal taxation and still-elevated unemployment levels.
The John Locke Foundation urges local government officials and taxpayers to continue to ask key ques- tions: What is the proper role of local government? What are essential services, and what are unnecessary frills? North Carolina’s families must face those kinds of questions every day in determining what are the essential expenses and unnecessary frills for their own households. Most people would probably agree that local government’s core services are fire, police, and sanitation. But would they agree that core services also include taxpayers’ subsidies to golf courses, convention centers, whitewater parks, and even restaurants? Especially in times of economic recession, these questions become even more important. While BTN does not answer these questions, it provides a baseline for discussing them. We at the John Locke Foundation believe that a lively public debate is healthy, and we are glad to provide this report to help foster and inform that debate.
-- Foreword by Dr. Michael Sanera, Director of Research and Local Government Studies, John Locke Foundation