By Jesse Wood
After Tuesday’s public hearing on the proposed ’17-18 budget, the Watauga County Board of Commissioners tabled a vote to digest the comments and deliberate.
With a property tax increase in the proposed budget to fund long-term capital improvements for Watauga County Schools and a recreation center, more than 25 people spoke during the hearing – with the majority favoring a tax increase to fund this infrastructure.
During budget workshops earlier this spring, the majority of commissioners favored a 4-cent property tax increase, which would generate $3.52 million in annual revenue until the next property revaluation in 2022. For this coming year, this revenue would fund $1.5 million to the long-term capital improvement plan for local schools and $2.02 million for a community recreation center.
Currently, Watauga County has the second lowest property tax rate in the state at $0.313 cents per $100 valuation, and a 4-cent increase would move Watauga County down to the fourth-lowest property tax in the state at $0.353. If this 4-cent increase were approved, residents would pay an extra $40 each year per $100,000 valuation. For example, residents with a $200,000 property would pay $80 more per year.
While County Manager Deron Geouque didn’t propose a budget with a tax increase, he noted in his budget message that existing revenues are insufficient to fund building new elementary schools, major renovations to school facilities and a recreation center. So staff prepared four revenue options for commissioners to consider.
Two of the options consisted of increasing the property tax rate by 3.5 cents or 4 cents. A third option included levying an extra ¼ cent to the sales tax, which would require a successful vote by registered Watauga County voters during the 2018 spring primary. The fourth option would be a combination of increasing the property tax and a successful primary vote on increasing the sales tax.
During the budget workshops, the majority of commissioners decided on the last option. Geouque said that commissioners decided to go with a 4-cent increase to the property tax and then schedule the sales-tax vote. If citizens elected to pay an extra ¼ cent on sales tax, then, Geouque said, the commissioners would reduce the property tax increase from 4 cents to 2 cents. Geouque said the ¼ cent increase to the sales tax roughly equals a 2-cent increase on property taxes in terms of revenue generated.
Four of the commissioners – Democrats John Welch, Billy Kennedy and Larry Turnbow and Republican Jimmy Hodges, who formerly served on the board as a Democrat – favored the combo approach, while Republican Commissioner Perry Yates favored a sales-tax increase and not a property-tax increase.
The commissioners will vote on the budget at one of its meetings in June.
Not everyone participating in the public hearing spoke specifically on favoring or opposing the tax increases for recreation and education infrastructure. A few spoke just on behalf of the Appalachian Theatre, Hospitality House and Community Care Clinic. But the majority speaking favored supporting the recreation center and capital improvements to Watauga County Schools by increasing taxes.
Five – Jeff Templeton, Nathan Miller, Paul Davis, George Wilcox and Tim Wilson – were opposed to increasing property taxes to fund these projects.
Paul Davis said he just recently moved to Watauga County, where his parents also reside. Davis mentioned that in planning to move both his business and family, he looked at the tax rates of different areas and found Watauga County’s low rate appealing.
“Every time there is a tax increase, it never goes away. When I was looking for places to move, I said, ‘Which places have a good tax base? Which places aren’t going to cost me money,” Davis said. “From my perspective, I see a tax hike and I know everyone says it’s a little tax hike. We have people up here talking about families being homeless and how one third of people that work here are in food service and for them a $100 per year [increase] is a lot different from people who sit on the board and the people back here. We are all wealthy … enough.”
Nathan Miller, a local attorney and former Republican chair of the commissioners, said that $30 million estimate to build a recreation center is “pie in the sky.” “That’s what the new high school was supposed to cost and that [ended up being] $80 million. Try to figure out what it’s exactly going to cost before you willy-nilly raise taxes. Some people say it’s a modest increase. I am shocked at a 13 percent increase.”
Miller and Jeff Templeton, a local businessman, took the time to criticize the recent deal between Watauga County and Appalachian State University. In April, the commissioners agreed to sell the 75-acre old Watauga High School property to App State in a cash-and-property transaction valued at roughly $18.3 million. The university agreed to buy the old WHS property for $15.5 million and give Watauga County, the old, old Lowe’s property on State Farm Road, which consists of 3.5 acres. The commissioners plan to build the rec center on this smaller property.
The deal is structured as so: “Appalachian will make a $25,000 earnest payment immediately. In October 2018 the university will turn the State Farm Road property, valued at $2,819,000, over to the county, and then will begin making annual payments on the property in 2022, paying $800,000 each year for 18 years. The final payment will be $1.1 million,” according to a release from App State.
“You possibly gave away the golden goose. That could be paying property tax, sales tax and occupancy tax for year to come which could fund the very things that are being requested here tonight,” Templeton said, referring to how App State won’t be paying property taxes or collecting occupancy or sales tax like other businesses that otherwise might have occupied that site.
Templeton suggested funding these projects by raising sales and occupancy taxes, which would also affect tourists and college students rather than squarely placing “the burden of these requests on the backs of property owners.”
“Yes, we have a low property tax percentage but we have high property values. That has to be considered in the equation when you are considering raising property taxes,” Templeton said.
Many others, however, spoke about “quality of life” and health benefits associated with an indoor recreation center. As one commenter noted, Watauga County is one of only a few counties in the state that doesn’t have a recreation center.
David Winkler, who noted the previous failure in the county to vote in favor of a sales tax increase to fund a recreation center in 2010, commended the commissioners and county manager for lining up this proposal.
“I know we’ve come close and worked on this a couple times and never quite got there. This is as close as I think we’ve been and I’ve been involved off and on for at least 20 years. I want to congratulate the board for fleshing out this proposal and finding two darn good ways to pay for it,” Winkler said. “My children are out of the house, so the impact on my children is diminished. But I look forward to it. Bottom line: Do I support a tax increase for our education and recreation facilities? My response is ‘bill me now.’”
Carson Coatney, who described himself as a father and business owner, voiced support for the tax increase. Coatney is also a board member of High Country Recreation, which has advocated for a recreation center in Watauga County for years now.
“We fully support this and this is a longstanding need for our community. Every one of the commissioners is on record saying they see this as a need and that they support it. There’s been discussion in the past about how to fund it and where it would be. Now thanks to the commissioners great work we have a place it will fit in perfectly with all the other recreation activities in our community, centered on the greenway and where current baseball fields are. It is a very exciting time to see this project finally happen,” Coatney said. “This has been a part of the last two master plans and I feel the support is here for the community and we now have the support, I believe, for a budget that allows us to build this center. Even though, my kids are growing up and may not get the full use of it, I look forward to seeing other children [and adults use this] community center.”
David Jackson said that in his role as the executive director of the Boone Chamber of Commerce he looks at the economic impact of projects. Jackson cited a study that noted one of the top issues employers are dealing with is employable people suffering from chronic illnesses and diseases that are no longer treatable.
“So the opportunity to have a rec center or a place where people can get good wellness care in our community will help keep people at work and that will keep our businesses open and our downtown and other areas of our community thriving,” Jackson said. “If you look at schools as well. There’s an obvious need for infrastructure. We’ve all seen documented comments about the need for infrastructure spending not only this year but from decades past … We need schools that aren’t going to crumble on top of [students] during the process of trying to learn to take the baton from those of us in these positions now.”
After the public hearing closed, the commissioners spoke briefly on the topic – although they decided not to immediately vote on the budget.
Commissioner Hodges didn’t speak specifically about the proposal, and Commissioner Welch spoke in support of both the education and recreation infrastructure funding: “It’s not a one or another type deal.”
Commissioner Billy Kennedy said, “There is some misinformation here. We are doing our due diligence. We have looked at the budget. Commissioner Hodges and I are [on a committee for] requesting qualifications for architects. We will get fixed bids and will try to find out what it costs. We feel the numbers will work with our budget as presented.”
Kennedy added later, “We haven’t raised taxes in 12 years. That would be 1 percent a year and inflation is running at least 2 percent a year, so we aren’t keeping up with the costs that are coming to us for our school needs and community needs and this is just something we need to do to be current and take care of our county.”
Commissioner Yates disagreed with the former statement by Kennedy. “I can’t see building these things when we can’t tell you [how much it will cost]. We had a recommendation four years ago when I came on the board that the rec center will cost between $30 and $35 million. We don’t know that. We haven’t hired a recreation center. We haven’t drawn the pool. We have a fiscal responsibility with your tax dollars and I don’t support the property tax increase because that puts 100 percent of the burden on local people. We are not touching the tourism or anybody else who comes up here and uses our beautiful facilities. We pay for it when we go to the beach, when we go to Pigeon Forge. If you increase your sales tax, the local people will pay their part when we spend money.”
Here’s how Commissioner Turnbow responded: “I don’t like paying any taxes … but I pay my taxes because I understand the commitment and need that goes beyond my individual desire. One of the things as a commission [that we’ve proposed] is not just raising property taxes but giving voters the right to decrease that by half if they would like to share in a ¼ of a cent increase in sales tax. You’ll have a right to vote on that. But when you talk about the elderly, people in need, people who are poor, I ‘ll point out that a sales tax hits those folks harder than anything else because they have to pay it on their groceries, their fuel, anything they purchase, their medicine. So going from second lowest property tax to the third lowest property tax in the state, I seriously doubt anybody that would consider locating here would not locate here because of that.”
See proposed budget here, which doesn’t include proposed changes shown in the graph below:
Note the following graphs are before the commissioner changes after budget workshops: