Category Archives: — PASQUOTANK COUNTY

McCrory to Obama: ‘No more Syrian refugees’

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RALEIGH – Many North Carolinians applauded Gov. Pat McCrory this week for asking President Obama and the federal government to stop sending Syrian refugees to North Carolina.

“The brutal murder of people in Paris reminds us that, sadly, terrorists can hide among the innocent,” said Francis De Luca, president of the Raleigh-based Civitas Institute, a nonprofit that espouses a variety of policy solutions from the conservative perspective. “It is vital to halt the influx of Syrians and others from the Middle East until we can ensure none are threats to the people of North Carolina.”

At a Monday press conference, McCrory asked President Obama to “take a deep breath and ask, ‘Are all of the people coming from Syria safe?’ We cannot know that they are. Therefore, our top priority must be to protect the people of North Carolina.”

“As the governor noted, North Carolina has long welcomed refugees,” De Luca said. “This includes the Hmong of Southeast Asia and the Karen people of Burma. But under these special circumstances, it is imperative that we accept no more Middle Eastern refugees until we have better information about all the refugees and until the nation institutes security measures to prevent terrorists from hiding among immigrants and refugees.”

At least nine other governors by midday Monday had said they would take steps to prevent new Syrian refugees from entering their states, as a precaution against terrorists among them gaining entry to the country.

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Monkeying with incentives not role of good government

monkey-152685_1280PASQUOTANK COUNTY — In June of last year, our County Commissioners considered the question of providing tax incentives to the developers of the shopping center adjacent to Walmart.

The developers proposed the question with the unstated suggestion that the failure to approve the incentive might jeopardize the project. The only Commissioner to vote against this proposition was Frankie Meads.

The other six members of the Commission Board voted in favor of providing the incentive – a 50/50 split with the City Council — under the presumption that there was too much to lose, or gamble, that the developer might actually pull the project. Considerations of how much money the developer had expended up to that point got lost in the shuffle, and our elected officials took the path of least resistance — with taxpayer money.

Local governments should focus on making their communities conducive to economic growth and business investment by keeping property and sales taxes low, while minimizing business regulations and assorted fees.

The focus of county budgets should be on essential government services, making sure that these services meet the needs of business. This focus would include providing reliable sources of water and transportation services that accommodate the desired lifestyles of the workforce and the needs of industry.

Beyond this, city and county government should allow business investment to take its course.

Real economic growth cannot be accomplished by targeting some businesses for special subsidies while burdening other businesses and citizens with the cost of those subsidies.

North Carolina’s county governments divert hundreds of millions of dollars in taxpayer money to private businesses in an attempt to attract economic growth and job creation. These subsidies come in a variety of forms, including property tax exemptions, direct cash grants, land conveyances, and low interest loans. These programs put county governments in the role of economic planner – a futile and misguided mission to pick economic winners and losers.

Typical of such efforts is one in Cabarrus County’s “Economic Development Grant Program,” described on the county’s website:

A Grant approved by the Board of Commissioners may be an amount equaling up to 85 percent of the real and personal property tax actually paid on assets eligible for this Program. The minimum incremental increase in assessed value of assets shall be $1.5 million, except in those cases where the Grant is used to encourage the development or help ensure the success of certain targeted businesses and/or geographic areas, where the threshold shall be at the discretion of the Board of Commissioners.

These grants are awarded with two main goals. One goal is to increase employment opportunities within the county as well as to increase the assessed valuation of the property.

Similar programs are in operation in most other counties in North Carolina. Furthermore, some of these grants are not only used as a way of enticing new investment. For example, Buncombe County recently transferred $84,000 from the pockets of county taxpayers to a plastic card manufacturing company.

This company as already been manufacturing its cards in the county and was investing in a $4.4 million expansion.

Apparently the $84,000 grant was awarded after the $4.4 million had already been invested. It was announced in October 2013 that the grant was approved. In the same announcement, the marketing coordinator for the company announced that the expansion was nearly complete. The $84,000 appears to be an after the-fact reward for investments already made!

While subsidies may benefit a targeted business or even entice a new business to locate its operations within a county, there is no such thing as a free economic development grant. These grants harm existing business and other taxpayers. Such policies do not generate net benefits for a county. Instead, they are wealth transfers that hurt some and help others.

When a county decides to use tax dollars to entice a new company to set up shop in a community, that money must come from somewhere. Local businesses and their employees must pay more in taxes and other costs to support the subsidized industry. As a result, economic growth for those businesses not receiving subsidies is discouraged. In reality, the subsidies end up being a mechanism for transferring wealth from existing businesses to the subsidized businesses and the people who work for them. That is why they are often referred to as corporate welfare.

Tax incentives have long been a tool by businesses, particularly in difficult economic times, and economically challenged counties, to offset some development cost in the name of Economic Development.

According to an insider familiar with the details of the proposed deal having to do with the shopping center next to Walmart, county and city officials hoped to structure the incentives in a way that would not be harmful to the interests of the taxpayers.

There is no doubt that officials believed the developer might walk away if the $325,000 were not approved. By then, the developer had invested considerable sums of money and was not likely to stop the development from going forward. But the developer played a successful game of chicken!

In that same context, we have seen numerous examples of businesses such as Dell Computers, and others, who achieve the tax incentives paid by the local government and then eventually walk away from the project altogether. For the sake of our elected officials and the citizens of this county, we can only hope that our investment in this project pays off over the long term.

Editor’s note: The John Locke Foundation contributed to this report.

Local debt squeezes tax money from useful priorities

pasquotank-copyPASQUOTANK COUNTY — In last year’s budget discussions, our commissioners raised our taxes, borrowed nearly $1 million and then dipped into our rainy day fund by an amount that was in the range of $500,000.

This paper recently reported that our commissioners were patting each other on the back because they had reduced the overall debt of the County from $78 million to $54 million — an accomplishment worthy of celebration.

Likewise, this improved the credit rating of the County from A- to A. But in the next breath, Commissioner Dixon remarked the change in credit rating would allow the county to borrow more money. Apparently, our Board of Commissioners knows how to spend money very well, but reduced the costs of borrowed money is not a high priority.

Borrowed money and debt service payments can squeeze out funds that should be available for other worthwhile purposes. But in the case of our county commissioners, for the moment, they seem unable, or unwilling, to accept that rationale.

A recent article provided by the John Locke Foundation is right on point with this discussion:

  • Local governments should put all debt to referendum votes concurrent with general or primary elections.

  • Governments should report the full financing costs and repayment plan for any debt before a vote and put the tax increase associated with the debt on the ballot.

  • Budgets and financial reports should include a full accounting of debt, including the divergent revenue to pay higher – cost, limited – obligation bonds, certificates of participation, installment purchase debt, and all other non-voter approved debt financing vehicles.

North Carolina municipalities and counties have issued debt or bonds to pay for specific projects such as schools and municipal buildings, jails, libraries, water treatment plants, streets, and sidewalks.

Historically, debt issued by local governments was voted on in referenda and issued as General Obligation bonds. However, over time, local governments found ways to incur more debt through faster, easier methods. Many started by moving away from voting on bonds during normal elections, scheduling votes at other times to ensure lower turnout.

In the early 2000’s, state legislation was passed that allowed local governments to use methods of borrowing money without asking for the approval of voters and taxpayers.

Today, many cities rely more on non-approved debt than voter-approved. At the end of the 2012 school year, Rocky Mount, Jacksonville and Concord had only non-voter approved debt.

Asheville had over 100 times more debt funded through non-voter approved methods than through voter approved.

Bond referenda for schools, libraries, and other projects often pass, but elected officials and government managers may claim other methods will reduce risk and taxpayer exposure, or take advantage of short – term dips in construction or finance cost. This is rarely the case.

There are major cost differences when local governments choose non-voter approved debt financing. General Obligation debt is paid through the taxing power of local governments, so investors face very little chance of default. Non-voter approved debt, is sometimes issued on an unsecured basis, for example by using a specific revenue stream, lease payment, or financing agreement.

Because of fluctuations in local revenue, governments have more chance of default on these types of loans, making this form of debt more risky and giving it higher interest rates.

Certificates of participation and other installment purchase plans also come with promises to protect taxpayers, yet local governments pledge their own assets, such as town halls and fire stations, as collateral to finance these projects. Banks are unlikely to repossess the properties for resale, so taxpayers would still be responsible for the town’s leaseback of these facilities.

The disproportionate amount of high- price debt has forced local governments to divert funds each year to pay debt service. As a result, these funds are not available for other needed services.

There is one county, for example, where annual debt service amounts to a whopping $1321 per person. Needed upgrades to water, roads or sewer systems must take a backseat to current debt and the interest it incurs. Whatever new tax revenue is dedicated to debt service is not available for other projects. Ultimately taxpayers are liable for the cost and should have a say through referenda in how much exposure they incur.

Between the years 2005 and 2012, per capita debt service payments rose in the state’s 100 counties to an average of $147 from a seven-year earlier tally of $113. Per capita debt service for municipalities was worse, rising to $226 from an earlier tab of $180.

A family of four spent an average of $320 more per year on debt payments for local government in 2012 than in 2005. In some areas, this may not include divergent revenue used to pay debt.

Portions of the foregoing were taken from an article by the John Locke Foundation.

County Commissioners need more clout in directing schools’ capital outlays

PASQUOTANK COUNTY — In the past, the autonomy of school boards in local jurisdictions has become an impediment for Boards of Commissioners to have a say in how taxpayer money for education has been spent. When there was a budget concern, the Commissioners were left out of the school board’s discussion while remaining responsible to the taxpayers for how much tax increase might apply to each budget year.

In 2013, House Bill 726 was introduced in the Legislature, which would have given Wake County commissioners the option of managing the school capital expenditures in that county. The bill failed but there remains interest in giving County Commissioners across the state some say in what needs to be done and how much to pay for it.

It has been suggested that appointed members of the community should serve on oversight boards — consisting of citizens who have expertise in various fields in an effort to make certain that the Schools achieve proper maintenance of the buildings while keeping the cost to the taxpayers as low as feasible.

In addition, these boards would serve as independent advisors and evaluators of the School Facilities Program.

This matter was discussed in Pasquotank County several months ago in conjunction with the partial replacement of a school roof. The suggestion was made by Commissioner Frankie Meads that a proposal such as this be discussed with the school board. But the rest of the commissioners rejected the proposal out of hand.

Those against the suggestion argued that the school board could sue the county. While that was and is true, these commissioners must not have been familiar with the General Statutes of North Carolina, which address the responsibility of the commissioners to not withhold funds unreasonably, but also provides that reasonable attempts by the commissioners to hold down costs are not a means upon which they should be sued.

The counties are under strain to reduce spending, rather than borrow more and more money.

Recently, Pasquotank County was advised by its auditor that the county’s long term debt had been reduced from $78 mill to $54 mill and that the county credit rating had improved from A- to A. Obviously that was good news.

But, the commissioners stated that this would allow them to borrow more money. So, maybe it was not so good after all. That same night the commissioners voted to donate a Snap on Tools truck that had been impounded 10 years earlier, to the City of Elizabeth City – a municipality in the county that has failed to pay its county-supplied water bill.

This delinquency has caused the county to incur thousands of dollars in legal expenses, but we gave them a truck anyway that was worth $2,500 at the minimum. So much for saving taxpayer’s money!

This newspaper intends to follow this matter to its conclusion, tracking any legislation introduced in this year’s General Assembly, and the progress it makes to becoming law.

Crime and Punishment in Pasquotank County – equal justice?

There were two Sheriff’s Deputies in Pasquotank County who were issued a county credit card for gas purchases in the course of their official duties. Over a period of time, these deputies used the cards to purchase gas for personal vehicles and boats. In the course of a routine audit, the Sheriff’s office determined that the theft had occurred, and the deputies were charged with 10 felonies.

The thefts totaled almost $13,000 according to information provided by Pasquotank County Manger Rodney Bunch. These actions occurred in Dare County.

One deputy stole $9,817 while the other stole $3,178. Once discovered, the deputies were allowed to repay these sums and retire from their posts in exchange for the charges against them being dismissed.

According to Bunch, resolutions of these cases were all negotiated by the Office of District Attorney Frank Parrish. This information was not reported in the local news, although it was reported by a paper in Dare County at the time.

Now, contrast this case with another case of alleged theft from the county, involving recyclable metals from the Solid Waste Division. The employee in this matter has been charged and awaits trial. The case involves approximately $6,000 and has seen repeated continuations.

The Grand Jury indicted employee James White on Dec. 9, 2013, and the case goes to trial more than a year later – reportedly some time this month. The current District Attorney, Andrew Womble, is prosecuting the case.

This newspaper will follow the case to its conclusion.