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State plans to gobble up county's proposed 1% land transfer tax

By Mike Cross
Posted Tuesday, March 20, 2007

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Chatham County, NC - I attended a breakfast meeting at the Governors Club this morning, sponsored by the Chapel Hill-Carrboro Chamber, the Chatham United Chamber, the Chapel Hill Association of Realtors and the Home Builders Association of Durham, Orange and Chatham.

Participation was cut off at 200, a full house! Keith Megginson, Chatham Planning Director, presented an overview of past, present and future Commercial and Residential Development in NE Chatham. Paul Black, Planner with TJ-COG, presented the Regional Factors of the NE Chatham area.

I was asked to respond to Land Transfer Tax questions and one item seemed to get a lot of attention! Senator Clodfelter of Charlotte-Mecklenburg, participated in a panel discussion in a Fiscal Modernization Workshop at the North Carolina Association of County Commissioners Conference last fall in Winston-Salem. He got a lot of attention there too!

I know Senator Clodfelter to be among the finest of our legislators, but I simply can’t agree with this particular proposal.

He proposed to rename the LTT as the 1% Real Estate Transfer Tax and claim the taxes as State revenue. Of course, SOME of the funds would be filtered back to the counties. The “rumor” is that he is about to file such a Bill! I have no idea if that’s true, but can you imagine, if it is? The Education Lottery percentages come to my mind. Distribution by population or Capital Improvement Plan needs would funnel the bulk of the revenue to the Metro areas. Of course, that would help Charlotte-Mecklenburg!

For the past 18 years, the NCRA and NCHBA have had a full time lobbyist at work and have prevented local governments from gaining referendum authority for Land Transfer Taxes. It certainly appears that this approach may be difficult to sustain!

If you were in the Developer/Builder/Realtor Industry or a Buyer and take pride in providing/owning quality development with all the amenities and it looks like 1% Tax is inevitable, State or Local, which option would you support:

  • 1% Real Estate Transfer Tax as a State revenue, to be “dispersed” and leave your local BOC short of the means to provide the Schools, Libraries, Government Facilities and increased services required for your community development …or…
  • 1% Land Transfer Tax as your County revenue, to help provide the funds your local BOC will require to provide the Schools, Libraries,Government Facilities and services that your new buyers will demand?

  • Another interesting rumor/question floating around is, if we do allow 1% LTT on a local option tax basis, can we put a 5 year Sunset on it? As long as that applies to All counties including the seven counties who have either BOC Enactment or Voter Referendum authority, I personally wouldn’t have a problem with that! Part of my job is to find the funds to cover our needs. I’m not trying to collect more taxes than we require! If it turns out that we eventually end up collecting more than is required, we can lower the tax to ½ percent just as Dare County has done. I would gladly accept a 5 year trial period to see how a tax with a 22 year history of success would work out for the rest of us.

    I believe these may well be our choices/options and we should join forces to support 1% LTT as a Local Option Tax and keep 100% of this Tax Revenue at home!

    If we don’t join forces, we could all lose!

     
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    State plans to gobble up county's proposed 1% land transfer tax
    Chatham County Commissioner Mike Cross shares his viewpoints with citizens on his weblog.


    Related info:
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