"No tax increase" is one of the first things you'll hear from supporters of the bonds for Charlotte-Mecklenburg Schools and Central Piedmont Community College.
But when you see a ballot, you'll find this wording:
“SHALL the order authorizing $290,000,000 of bonds secured by a pledge of the faith and credit of the County of Mecklenburg to pay capital costs of providing school facilities, including the acquisition and construction of new school facilities, the improvement and expansion of existing school facilities and the acquisition and installation of furnishings and equipment and the acquisition of interests in real property required therefor, and a tax to be levied for the payment thereof, be approved?”
“SHALL the order authorizing $210,000,000 of bonds secured by a pledge of the faith and credit of the County of Mecklenburg to pay capital costs of providing community college facilities, including the acquisition and construction of new community college facilities, the improvement and expansion of existing community college facilities and the acquisition and installation of furnishings and equipment and the acquisition of interests in real property required therefor, and a tax to be levied for the payment thereof, be approved?”
If you plow through that dense prose (the first item is CMS bonds, the second is for CPCC), the part about approving "a tax to be levied for the payment thereof" may sound like you're being asked to OK a tax hike.
That's not the case. Tax revenue will be used to repay the bonds, but that doesn't mean a tax increase.
Bonds are essentially a line of credit authorized by the voters. As Mecklenburg County officials learned when the recession hit, if you run up the tab on borrowing you face a painful choice: Raise taxes and/or renege on promises made during bond campaigns. The county slowed down on the CMS projects promised in 2007, resulting in some that haven't been started as the 2013 campaign gears up. They'll eventually get done (read an update here), but not as quickly as voters expected in 2007.
|Grand Oak Elementary, a 2007 bond project, opened in August|
County officials also rethought their borrowing strategy. They've calculated that they can pay back the $500 million in CMS and CPCC bonds with the revenue they've got, which means they won't have to raise property taxes to handle the debt. The plan is to spread that borrowing over the next four years.
Here's how County Commissioner Bill James describes it: "The question of whether a bond package causes a tax increase depends on whether the government issuing the bonds has an adequate bond fund. When I was first elected in 1996 the first item I pushed for was a bond fund. It took 15 years but we finally got one."
"The money to make the bond payments (on the bonds on the ballot) are included in the current tax rate. So, absent some sort of fiscal meltdown, these bonds should be able to be issued without any impact on existing taxes."
So, no tax hike. The trade off is that the list of projects on the 2013 bonds for CMS is a lot shorter than district leaders would like. Superintendent Heath Morrison, Associate Superintendent Guy Chamberlain and others are quick to note that $290 million for CMS is tiny compared with the $810 million that's on the ballot for Wake Public Schools in October or the $1.89 billion that Houston voters approved last fall.