A land transfer tax makes sense

By Robert Eby
Posted Sunday, June 17, 2007

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Pittsboro, NC - Based on the population growth from 1970 to 2000, Northeast Chatham is projected by the Triangle J Council of Governments to have 117,000 residents by 2035, growing at an average rate of 4.2% per year. (From 1980 to 2000 the growth rate was actually 5.0% per year, which would increase the estimate to 146,200 for Northeast Chatham by 2035.)

How will Chatham County pay for the infrastructure needed to support this burgeoning population? Where will the funds come from for schools, county office and social service buildings, water and sewer systems, court houses, fire houses, and libraries?

Today Chatham County is “behind the curve” in meeting it’s exploding infrastructure needs. There is a $2,900 School Construction Impact Fee paid by each new home built in the county, but this is not sufficient to pay the cost of the new schools that are required, let alone other county needs.

Currently all the rest of the funding is obtained via real property taxes. Certainly new residents will continue to pay such taxes. Study after study, however, has shown that new residential property owners provide less in tax income to the county than is spent in services to these new residents. The only current way to pay for all the new costs is to keep raising the tax rate on all of Chatham’s residents, new and old.

Another way would be to impose a 1% Land Transfer Tax on all real property sales. Currently this method is permitted and being used by six Eastern Counties in North Carolina. It is a HUGE SUCCESS! Adequate funding is being provided for infrastructure needs.
Residential and economic development is strong. Capital needs are being met, and in some cases, real estate taxes lowered.

For Chatham County to put a Land Transfer Tax in place, three things must happen. First, the NC Legislature must pass enabling legislation, second, the County Board of Commissioners must approve the idea and put it to a referendum vote, and finally we, the citizens, must vote to approve the Land Transfer Tax. There will only be such a tax, if we vote Yes.

More details are available on the County’s web site. Also listed there are members of the House and Senate Finance Committees.

I urge you all to support this enlightened way of financing our infrastructure needs. Email or write the above legislators and ask them to support House Bill 711 and Senate Bill 1516, both of which enable a Land Transfer Tax.