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Raise Taxes? Lower Taxes? City And County Budget Views Differ

If you follow local government, you know this is budget season. And if you know that, you probably also know that we've got an interesting situation on our hands: The Charlotte City Manager thinks the city needs to raise the property tax. The Mecklenburg County Manager wants to lower it. Now, these manager jobs are not partisan offices, so this is not just a situation of political ideology. What's really going on? The really interesting part about this is that both budget proposals are a direct response to the current economy. But if the city manager says "raise taxes" and the county manager says "cut them" are they even looking at the same economic reality? The answer is yes. They have the same information on unemployment and housing prices and so on. Both budget proposals acknowledge that we've been through a rough patch. Both say tax revenues are starting to come back. The reason the budget proposals are so dramatically different has a lot to do with the different roles of the city and county. The county sees itself as the "softer side of government." Kind of like an ice cream cone: The county is the soft-serve. It's responsible for the services that touch people - education, health and social services, libraries - all stuff that fluctuates a lot depending on the needs of the community. That makes the county budget a little runny and hard to contain. The city is the ice cream cone - the infrastructure. It's responsible for roads and water and sewer lines, also the brass tacks: police and fire services. When economic times are hard, people tend to slurp down more of the county's "ice cream" - free health care, free library books because they can't afford to buy them, support for kids struggling in school because their family is newly-homeless . . . that sort of thing. But the ice cream cone isn't really affected like that in hard times. The roads and sewer lines have to be maintained, sure, but not constantly replaced. Which is why the county's budget took a bigger hit during the recent recession. And now, the County Manager is looking at all those cuts saying "Hey, I kinda like how this diet made us look. We're more efficient now. Let's not just pack the weight back on because tax revenues are improving. Let's cut taxes." County Budget Director Hyong Yi says the vision is to limit the number of new things the county does and really "focus on making sure the things we're doing right now are adequately funded." "Then that leaves enough money on the table that you can . . . give taxpayers a break," adds Yi. That "break" amounts to $49 on the annual property tax bill for a $200,000 dollar home. Meanwhile, the city's budget team has been pouring over maps. They plotted foreclosures on a grid of the city and discovered a crescent shape in red. It starts in West Charlotte, runs north of Uptown and over to the East. That same pattern shows up when you plot poverty rates, food stamp clients and struggling schools, too. Then you look at property taxes and the southern wedge through Southpark down to Ballantyne is basically subsidizing the rest of the city. Half of all property taxes the city collects come from that one small area. But that's nothing new for Charlotte. . . so how exactly does raising taxes right now help that? Because the city manager is convinced the recession pushed these already-struggling neighborhoods to the edge of a cliff. And, if we don't do anything now, we'll have more of the same and the trends will get worse," says City Interim Budget Director Randy Harrington. The plan is to pump almost a billion dollars into a few specific trouble areas over the next several years. The city's property tax would go up about $72 a year on a $200,000 home. The money would build new roads, sidewalks, bridges, a streetcar line and a bunch of other projects to theoretically improve property values in these neighborhoods, make it easier for people to get to work and attract new development. So the city wants to raise the average property tax bill by $72. The county wants to lower it by $49, meaning the actual tax increase for a person who living in Charlotte would only be $23. The county's kind of doing the city a favor by off-setting the proposed increase. So, did the city and county make a deal to have it work out that way? They say they didn't. Budget teams at the city and county make sure they're using the same tax projections, but then pretty much go their separate ways. Call it a happy coincidence. Maybe they should celebrate over ice cream. The public is invited to comment on the County's proposed budget at a hearing tonight at 6 p.m. at the Government Center. The city will hold its budget hearing next Tuesday at 7 p.m.