Statement of Karen Rindge, Chair, WakeUP Wake County
Before the Wake County Commissioners
February 19, 2007

Fair Growth Funding is a Solution for the School Bond

Good afternoon Chairman Gurley and Board members. I appreciate the opportunity to speak today about a matter of great concern to parents and taxpayers. I’m Karen Rindge, and as Chair of WakeUP Wake County, I speak on behalf our non-profit, non-partisan citizens’ organization which supports well-planned, sustainable growth.

Your Board of Commissioners and the Wake school board are debating putting another $1 billion bond on the ballot in 2007 or ‘08 to pay for needs of a rapidly growing school system. While the need for another bond is undeniable, WakeUP believes the next bond will not pass because many taxpayers feel they are maxed out and will not support it – unless. Unless, we identify other funds to pay for the bond rather than solely relying upon further taxation of property owners. Indeed, costs that the public incurs because of growing population – such as new schools – should be shared by those who benefit directly from the growth itself.

WakeUP Wake County proposes a solution -- a solution being used in nine other North Carolina counties and around the country, and we call it Fair Growth Funding. When new homes are built and more children need to go to school, how will those costs be met? Because the property tax alone isn’t enough to keep up, as we grow, our property tax rates grow too. But many of our taxpayers, like the elderly, are on fixed incomes, so the growth that the rest of us enjoy, is not really fair to them.

Our solution:

First, Wake should enact a countywide impact fee on new homes. A poll last week shows 69% of Wake citizens support this.

Second, the county should enact a transfer tax on all real estate transactions, for the purpose of generating even greater funding.

The fact is, the building and selling of real estate is tied to growth, and if funds were generated specifically from that growth, growth would be paying its fair share.

WakeUP calculates that we could generate approximately $144 million annually in Wake County from a 1% transfer tax (and this is based on your county manager’s figures on the deed stamp tax). Further, by our conservative estimate, Wake could generate $50 million a year if we had a countywide impact fee. Combined, that’s almost $200 million a year! If that were bonded, we could go to the voters with a $2 billion bond issue and assure them that it would not require increasing the property tax. Ladies and gentlemen, this is not a new idea. In fact, county commissioners around North Carolina are clamoring for these new options to generate local funds. Many states are using these fair growth funding options. Why not here?

Your board has already stated support for a “menu of options” to meet our growing infrastructure needs. However, your official legislative agenda only states support for a 1-cent sales tax increase. Sales taxes are our most regressive, and unfair, way of raising money. Not only would that sales tax increase generate little – about $30 million for schools – it wouldn’t keep up with growth in the number of students or school construction costs. In short, it’s too little, and it’s not fair-growth funding.

WakeUP is again respectfully asking the County Commission to pass a resolution that calls on the General Assembly to authorize our county to implement fair growth funding options, specifically, a 1% transfer tax and impact fees. Unless you ask for the legislation, it will not happen. This is costing Wake County to not act.

We need more schools — parents in Apex can tell you that. The real question is: WHO is going to pay for them? Just our long-time property owners? Or growth paying its fair share too?

Thank you.