Budget swaps taxes for garbage collection fees

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High Point City Council credit Jordan Green
Councilman Latimer Alexander would like to make a point.

by Jordan Green

An annual budget to be adopted by High Point City Council on Thursday reduces the tax rate while increasing garbage collection fees commensurately to offset the loss of revenue.

The 1.4-cent tax decrease slated for approval by High Point City Council on Thursday morning is a fiscal sleight of hand that is spelled out plainly in City Manager Greg Demko’s budget message.

“This tax rate decrease is the second year of a three-year decrease which is anticipated due to moving the environmental service division from the general fund to the solid waste enterprise fund,” Demko wrote in the May 18 document.

The cut to the tax rate costs the city $1.3 million in revenue for the general fund, according to budget message. Meanwhile, an increase in garbage collection fees from $8 to $11 per month per household to support the solid waste enterprise fund generates a roughly commensurate $1.5 million.

Mayor Pro Tem Jim Davis and other conservatives on council insisted on sticking to the 1.4-cent tax cut, while at-large Councilman Latimer Alexander, representing a more moderate tendency, proposed a more modest 1.2-cent decrease to retain funding for street resurfacing and other needs. One option presented to council by Demko on June 10 was imposing a new $5 annual fee on motor vehicles. Councilman Jason Ewing, a conservative, indicated he would prefer a vehicle fee over compromise on the tax rate.

The comment prompted a lecture from Alexander that alluded to the regressive impact of offsetting revenue losses from property tax cuts through fee increases.

“It’s a fine revenue source, but remember your math class,” he said. “You’re moving the funding of government from the largest holders to the smallest holders. And it’s fine if that’s what you want to do, but you’re moving it down the line.”

He illustrated his point by noting that the 1.4-cent tax decrease will result in a $16,000 tax cut to Ralph Lauren for its new $14 million facility on Highway 68, while ordinary residents will pay $5, $10 or $15 more to the city, depending on the number of cars they own.

Davis expressed a different perspective.

“Yeah, but see, I look at that different because we’ve increased our tax base,” he said. “We’ve got jobs. Those people are going to spend money in our community.”

The total assessed valuation of combined real estate and personal property in the city rose from $8.9 billion in fiscal year 2013-14 to $9.1 billion in fiscal year 2014-15.

In the deal hammered out between Alexander and Davis on Monday afternoon, the 1.4-cent tax decrease stays and the plan to impose additional vehicle fees is scrapped, while the city retains $1.9 million in the budget for street resurfacing and $500,000 for demolition of condemned houses. Meanwhile, the budget would increase an appropriation from the previous-year fund balance from $2.5 million to $2.7 million while reducing the city’s contribution to a consolidated economic development fund — a partnership with Greensboro and Guilford County — from $300,000 to $100,000 to free up additional funds.

The proposed budget also increases the water and sewer rate by 3.5 percent, and increases stormwater fees from $2 to $3 per month.

Staff will present council with a budget ordinance for adoption on Thursday at 9:30 a.m.

Before voting to finalize the budget during a city manager’s briefing on Monday, council members considered a request by at-large Councilwoman Cynthia Davis to eliminate $13,500 from the human relations department’s budget for a youth white privilege conference. The motion failed on a split 4-4 vote, with Cynthia Davis, Jim Davis, Jason Ewing and Jay Wagner in support and Latimer Alexander, Jeff Golden, Chris Williams and Alyce Hill opposed. Mayor Bill Bencini was not present for the vote.

Golden also fended off cuts to code enforcement and street sweeping, warning that if they didn’t stay in the budget he wouldn’t be able to support the ordinance.

Demko argued that street cleaning and other public stewardship efforts need to go beyond federal mandates.

“The cleaning up of the community with code enforcement, with street sweeping, with higher maintenance of our landscaped medians is more intended for how do we grow our property values,” he said. “As we do these programs to attract people into the city, to bring retail into the city, that they come here and they say, ‘This city cares. Let’s find out more. Let’s do something.’”

The budget proposed by Demko attempts to address what the city manager characterizes as a “a decline in the appearance of the city” through a number of different approaches. The budget adds funds for four full-time code-enforcement officers to tackle dilapidated and substandard housing.

“These additional resources will give us the staffing to go from a complaint-driven system to a system where we have the ability to self-initiate action on many code enforcement violations throughout the city,” Demko wrote.

Other strategies including additional funds for mowing, litter collection and street sweeping, along with an additional $500,000 for redevelopment, including purchasing properties in targeted communities for land banking and accelerating the efforts to tear down substandard housing.

“I cannot overstate: If we want to get better, if we want to raise the values in our community,” Demko said on Monday, “we’ve got to step up and be the leader.”

  • Observer

    Bottom line is that the owners of larger homes and properties do well, and everybody else takes it in the neck.
    The extra hit in fees and utilities are going to far outweigh the tax “cut” the most on people whose homes cost less, while the more expensive the home the more the payback.
    City gives you a dollar and takes $6 back..
    Shell game and the average working class folks, as usual, are the losers.
    Less you got, the more you pay.
    Life in North Carolina’s most expensive city of size

  • Frank Swatson

    Sometimes I wonder if council, not particularly known for their smarts, really thinks this sort of thing fools the taxpayers. It doesn’t, you know. The bottom line remains the bottom line.

    Note also that the public meeting is being held at a time when the public will be at work, trying to make the money to pay High Point’s out of control taxes and fees. This meeting timing, of course, it by design. If no one can show up to speak against the budget, council will say they assume everyone here is for it. We’ve heard the mantra before “It had citywide support!”

    At the end of the day, the cost to live and work in High Point just got more expensive.