Land transfer tax offers opportunity
David Peoples is the county manager of Washington County.
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The purpose of this article is to share information with the citizens of Washington County regarding the potential benefits of a land transfer tax should it be approved by our citizens during the fall 2007 elections.
Since 1980, Washington County has experienced a continuous decline in its population. In 1980 the population of the county was 14,801 citizens. The county’s population now stands at 13,228 citizens. Current projections indicate that by the end of fiscal year 2020, the population of the county will be below 12,000 citizens.
Unfortunately, our county has continued to experience significant job losses in four of our five largest industry sectors. The county continues to suffer from extremely high unemployment rates that exceed the state and national average by over 2.5 percent. We continue to rank in the top 20 percent of counties with the highest property tax rates in our state.
It is imperative that we address and reverse this staggering economic decline. Washington County continues to fall further behind in the recruitment of industry and commercial business. The county has had 13 businesses over the past 12 months consider us for possible plant “start ups” or “relocation” to this area. We have not been successful in capitalizing on any of these business opportunities. The major reason we have failed is a lack of infrastructure. We do not have sewer to support the needs of some of these industrial concerns. We lack a “state of the art” industrial complex, with appropriate buildings, modern communications capabilities, rail lines with adjourning rail spurs and available land that has been properly prepared for development. In addition, there are other recruitment attributes that we are deficient in; limited emergency medical service and fire facilities, school improvements, an additional library and modern recreational facilities.
Washington County government employees spent the better part of a year studying the county with the assistance of private business development professionals to formulate an economic development and infrastructure plan that identifies and addresses infrastructure that we must put in place so that our county is better positioned to attract industrial, commercial and residential growth. If we do not commit to spending large sums of money to put these critical infrastructure items in place, we will not grow and the future will mirror what we have realized from a population and economic development perspective since 1980.
A land transfer tax has the potential of being a vehicle that can supply significant funds to put in place some of infrastructure needs that we have and assist in containing future property tax increases. A land transfer tax is a fee that is charged only when a piece of property is sold. The fee that is charged is 1 percent of the selling price of the property. If a piece of property sells for $85,000, then the fee would be $850 and the seller would pay the fee at the time of the closing of the real estate transaction.
If Washington County had the land transfer tax in place during fiscal year 2006/2007, the county would have collected approximately $300,000. The $300,000 would have allowed the county to borrow over $4 million and the debt service on the loan could be paid by the land transfer tax money. This means the county would be in a position over time to construct an industrial park with an appropriate industrial building, construct a sewer system, expand the water system, construct additional medical/fire facilities, address some of the school system renovations needs or improve recreation facilities.
Some of these additions can be accomplished with the land transfer tax while not having to raise property taxes. Again, the land transfer tax can provide funds that will allow the county to invest in the future while containing property tax rates. If the county does not address infrastructure and economic development needs, the county will continue to have population losses, job losses, high property tax rates, high unemployment rates and high poverty rates.
Chowan, Camden, Pasquotank, Dare, Perquimans and Currituck counties have had a land transfer tax in place for approximately 20 years. In 1985, these six counties’ property tax rates averaged $.67 per $100 of accessed value. In 2005, these same six counties’ property tax rates averaged $.37 per $100 of accessed value. This means the average property tax rate declined by $.30 for these counties. These counties have realized substantial population growth and increased economic development activity during this period. Every county, including Washington County that surrounds this group of six counties lost population between the years of 2000 through 2004.
Bobby Darden is the Perquimans County manager. Bobby has publicly stated: “We averaged almost 30 percent annual growth the last four years. We are issuing about double the amount of dwelling permits now than we were just a few years ago.” Must Washington County continue to struggle financially? Must we continue to see our young people leave home because we do not available high quality jobs? Must we continue to have to pay exceptionally high property rates? Must we continue to lose industrial, commercial and residential development opportunities because be have such a severe lack of infrastructure? If we will pass a land transfer tax, we can address many of these issues and provide a more abundant future for all of us.
Washington County officials will be holding public meetings in an effort to provide information on this extremely important issue. The meetings will also allow our citizens to ask questions about the land transfer tax. These meeting dates, times and places are as follows: Oct. 22, 6:30 p.m. at the Windows of the World in Roper; Oct. 23, 6:30 p.m. at the Ruritan Building in Creswell, and Oct. 29, 6:30 pm at the N.C. Cooperative Extension Building in Plymouth. We encourage everyone to attend these information meetings. If you cannot attend a meeting in your area because of a conflict, please come to one of the other meetings in one of the other areas.
The land transfer tax issue is one of the most important issues that our county will consider in its future. We urge each citizen to learn as much as they can about this issue so that when we vote in the fall 2007 elections, we can make an informed vote.
In closing, please remember you do not have to pay a land transfer tax if you do not sell a piece of property. You can give your property away, you can donate your property or you can will your property to someone or some organization and you will not have to pay a land transfer tax. Renters of property do not have to pay a land transfer tax.