The
General Assembly passed a law in 2007 empowering
counties to raise new revenues for needed infrastructure,
like schools. Counties can levy either a 0.4%
real estate transfer tax or a 0.25% sales tax
if approved by voters in a local referendum.
Although both options raise new revenue, the
transfer tax will generate more funds in Wake
County and in a fairer way.
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WakeUP
Wake County’s Powerpoint:
Transfer Tax: Growing Paying for Growth |
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The
Problem
Wake County school student enrollment is due to double
to 250,000 by 2025. That means 82 new schools must be
built to keep up with our rapid population growth. What’s
more, the average cost of adding a school seat is roughly
$30,000 now, but could reach $44,000 within five years
because of inflation. Other requirements -- such as
renovating our oldest schools and reducing the number
of trailers -- bring total needs to $2.6 billion over
the next five years alone.
An
Important Part of the Solution
In Wake, a 0.4% transfer tax can generate $50 million
this year, enough to fund a $500 million school bond
(equivalent to more than 20 new elementary schools)
and decreasing the need for property tax increases.
Transfer taxes are not the entire solution, but they
provide new revenues that grow with the economy. The
reality is, either everyone’s property taxes go
up, or growth helps pay its share through transfer taxes.
How
the Transfer Tax Works
- Transfer
taxes apply to all real estate transactions. The revenue
stays in the county where it was collected.
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In Wake, land sales, new residential and commercial
development will pay about 65% of the transfer taxes.
Growth will pay for growth.
- Transfer
taxes are based on value. Starter homes will pay less
than large estate homes.
How
the Transfer Tax Differs from Property Tax
- Unlike
property tax, as long as you live in your home, you
do not pay the transfer tax.
Transfer taxes help low-income citizens remain in
their homes by avoiding increases in property taxes.
- How
the Transfer Tax Helps Our Schools
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The transfer tax can generate $50 million this year
and $100 million in six years.
- Transfer
taxes will help pay for growth and inflation in costs
of land, materials and labor for school construction.
- Transfer
taxes for school construction will free existing county
revenues for improving K-12 education. Our school
system spends $40,000 less per classroom each year
than the average U.S. school system.
Why
the Transfer Tax Is Better than a Sales Tax
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The 0.25% sales tax will bring in about 80% less revenue
than the transfer tax this year.
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The revenues from the sales tax will grow far slower
than those from the transfer tax.
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Over time the revenues from the transfer tax will
far exceed those from the sales tax
- The
sales tax takes a higher proportion of income from
low-income families than from affluent families.
How
You Can Help
-
Ask the Wake County Board of Commissioners to pass
a resolution that 100% of transfer tax revenues will
be used to repay the next school bond. www.wakegov.com/commissioners.
-
Ask the commissioners to put the transfer tax to a
vote without a sales tax. If both are on the ballot,
the neither tax may pass.
- Volunteer
for WakeUP’s efforts to educate voters, parents
and local community leaders.
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