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Does Onslow Need A Sales Tax Increase?
Does Onslow Need A Sales Tax Increase?
68
for Truth
Executive Summary
• The Onslow County commissioners are asking county residents to
approve a sale-tax increase on November 4. County officials indi-
cate that the revenue from the tax increase, if passed, would “pay
for much-needed capital projects such as schools.”
• Commissioners’ intentions are not legally binding. Once passed, all
new revenues, by law, may be used for any legal purpose.
• This Regional Brief finds that Onslow County’s problems are not
created by a lack of funding. The almost $36.7 million in savings
200 W. Morgan, #200 and revenues identified in this report is more than nine times the
Raleigh, NC 27601 amount that the proposed sales-tax increase is estimated to produce
phone: 919-828-3876 (see Figure 1). If the county used this money instead, it could delay
fax: 919-821-5117 a sales-tax increase for over nine years.
www.johnlocke.org • County revenues have grown 35 percent faster than population
The John Locke Foundation is a
and inflation since Fiscal Year (FY) 2002 (see Figure 2). The total
501(c)(3) nonprofit, nonpartisan research
institute dedicated to improving public
amount of revenue for FY 2007 was almost $27 million more than
policy debate in North Carolina. Viewpoints in FY 2002. By FY 2007, the average family of four paid $668
expressed by authors do not necessarily
reflect those of the staff or board of more in taxes than in FY 2002. It would take a 54 percent increase
the Locke Foundation.
in family income (current dollars) to match the increase in revenues
that the county has received over those five years.
The authors thank John Locke Foundation research intern Clint Atkins for his assistance with this report.
d o e s O n s l o w c o u n t y n e e d a s a l e s - ta x i n c r e a s e ?
Revenue Growth
Revenue in excess of population and inflation (FY2006) $26,877,658 $268,776,581
TOTAL $31,470,933 $317,152,819
regional brief
d o e s O n s l o w c o u n t y n e e d a s a l e s - ta x i n c r e a s e ?
much tax money commissions can spend on inflation. Federal per-pupil expenditures
public “education” campaigns requesting increased by 26 percent during the same
that voters approve the tax increase. period. Thus, local and federal spending on
the Onslow County Schools significantly
Public School Spending2 outpaced enrollment growth.
By far, counties spend more money on public The North Carolina Department of
education than any other area. Total local Public Instruction (DPI) projects that Onslow
government spending on public education County Schools will add 3,315 students over
was $2.68 billion or $1,934 per pupil for the the next ten years, a 14.2 percent increase.
2006-07 school year. Nearly 25 percent of all The state’s Public School Building Capital
expenditures on public schools come from Fund, which includes lottery funds, will pro-
local tax revenue. Given the amount of tax- vide Onslow County with an estimated $42.7
payer money involved, sympathetic appeals million over the next ten years.
for school funding should not come at the In order to stretch those dollars to handle
expense of sound fiscal policy the expected growth, the school system
County governments and school boards should redirect funds away from low prior-
should spend local tax dollars for education, ity projects, reduce the size of the school
as well as hire public school personnel, in bureaucracy, pursue ways to reduce construc-
proportion to changes in their school popula- tion costs, redirect existing revenue streams,
tion. In Onslow County, from 2002 to 2007, and implement sound facilities alternatives.
there was a seven percent increase in student With proper planning and “out of the box”
population. At the same time, there was a 20 thinking, the school district can manage
percent increase in local, inflation-adjusted enrollment growth using proven, cost-effec-
per-pupil expenditures. tive construction, renovation, and mainte-
Over the last five years, the state in- nance solutions that are taxpayer-friendly
creased per-pupil expenditures in Onslow and enhance educational opportunities for
County by seven percent, adjusted for students.
(2006 $)
$700
$650
$637
Amount actually collected
$600
$550
35%
$500
$400
$350
$300
2002 2003 2004 2005 2006 2007
Fiscal Year
Source: State Treasurer's Office
J o h n l o c k e f o u n d at i o n
d o e s O n s l o w c o u n t y n e e d a s a l e s - ta x i n c r e a s e ?