A tax increase that’s not garbage

Here’s one advantage to Charlotte’s council-manager form of government – also known as a “weak mayor” system: City managers, who are unelected, can do politically unsavvy things like propose property tax hikes in an election year.

And sometimes, those proposals make sense.

So it is with Charlotte City Manager Ron Carlee, who proposed a budget plan this week that would replace a $47 garbage collection fee for homeowners with a property tax increase of 1.35 cents for every $100 of taxable value.

The maneuver would help the city make up some of the $22 million shortfall it faces in the 2016 fiscal year. Most of the rest would come from internal measures, including cuts in city departments.

Carlee’s proposal – at least the property tax part of it – was met with skepticism at a City Council meeting Wednesday. The skeptics included at least a couple of people who happen to be running for mayor right now, the Observer’s Steve Harrison reported.

Current Mayor Dan Clodfelter worried that Carlee’s plan would raise taxes on commercial property. At-large council member Michael Barnes, who’s also running, asked for plans that involved more budget cuts and less of a tax hike.

That’s a legitimate request. But Carlee’s proposal offers a smart way to attack the $22 million shortfall without putting too much hurt on critical city departments and programs.

While everyone, including businesses, will pay more in property taxes, most homeowners would actually pay less overall after losing the $47 garbage collection fee. The break-even point for homeowners is about $267,000 – if you live in a home that has a lower property value, you’ll pay a little less under Carlee’s plan.

Businesses don’t pay the $47 garbage fee, so they would pay more overall with the property tax increase. But remember, those businesses are likely paying less to the city in taxes now that N.C. lawmakers eliminated a business privilege tax that cities collected each year. That $18 million loss in revenue is largely what put Charlotte in this budget crunch.

A note: A separate stormwater plan would also raise rates for people with big homes or large driveways. That plan is about paying for more stormwater projects and making the rate structure more fair, not solving budget woes.

Also, the city and council have been mulling a “pay as you throw” garbage fee system that would charge homeowners based on their garbage volume. Carlee told the editorial board Wednesday that he’s never seriously pursued the idea, although he likes its objective of increasing recycling. The city should look for other ways to achieve that goal, he said.

We agree. Charlotte shouldn’t bait-and-switch its residents by taking away a garbage fee in exchange for a property tax increase, then implement a new type of garbage fee later.

Carlee also kept Charlotte’s streetcar extension safe from the budget knife. We’ve been less than certain in this space that the streetcar extension is the wisest way to spend millions on struggling neighborhoods in east and west Charlotte, but that long-term debate should be kept separate from the urgency of a budget crisis.

Make no mistake, it is a crisis. Carlee has a tough sell with his election-year tax hike, but his plan offers a smart blueprint to equitably address a critical budget shortfall. That’s just the kind of thing we elect people to do.

This story was originally published May 7, 2015 at 5:02 PM with the headline "A tax increase that’s not garbage."