This started with a simple question: Why should I pay the City of Durham $51.48 a year to pick up my trash, recycling and yard wasteas proposed by the city’s garbage honchoswhen I’m already paying property taxes? Isn’t garbage collection a fundamental municipal service, like maintaining streetlights or letting developers build whatever they want?
Then I read that it would replace the voluntary $60 annual fee I’m paying to have yard waste picked up, even though the city has been mixing it with the trash ever since the city’s illegal yard waste dump burned up. Hmmm. Not so bad.
And I found out that households in Raleigh are paying $132.80 a year to have their garbage and all the rest collected. A bargain.
But no, it’s not. It’s a sign of how irrational North Carolina’s system of taxation has become. From the local and county level up through the state, we have created a system that piles on fees to make up for its lack of order, hitting poor and middle-income people the hardest. On top of that, particularly in a booming area like the Triangle, growth is creating tremendous wealth, but that wealth is going untapped just as it’s needed most to pay for schools and all the other services new residents require.
Take Wake County. It’s no coincidence that its school system is in crisis. As a result of the no-new-tax politics of the 1990s, Wake has a tax rate below the state average (and the lowest in the Triangle) and is digging an infrastructure deficit predicted to total $26 billion by 2030. Exacerbating the problem is an eight-year revaluation cycle that lets skyrocketing property values go untaxed on homes that are bought and sold within that period. That’s why the transfer tax on home sales is a good ideait will help pay for growth by capturing some of the wealth that growth created. Another is the four-year revaluation cycle recommended by the Blue Ribbon Committee on the Future of Wake County that likely will be adopted next year.
Wake’s problem is consistent with the N.C. Budget & Tax Center’s finding that North Carolina is not a “high tax” state. In 2000, we ranked 37th nationally in combined state and local taxes as a percentage of personal income, and 30th nationally in total taxes per capita. The center also found that if there’s a guiding tax principle at work, it’s that a half-century of “progressivity” wealthier taxpayers paying a higher proportionate share of taxeshas evaporated. Instead, the burden is falling increasingly on low- and middle-income taxpayers. Given the role big money plays in lawmaking these days, we don’t have to wonder why that is. (You can see the Budget & Tax Center’s reports and recommendations at www.ncjustice.org.)
As a result, I may be asked to pay a flat $51.48 garbage fee instead of an additional 1.5 cents per $100 in value on my property taxes (which would be a lot cheaper). Like everything else about our taxes, it doesn’t make sense.