By Susan Dickson
Staff Writer
The Board of County Commissioners voted unanimously on Tuesday to put a land transfer tax on the May ballot.
Voters will decide whether property sellers will pay a 0.4 percent land transfer tax. If the measure passes, the county could begin collecting funds during the 2008-09 fiscal year.
In this year’s state budget, the Legislature gave counties the option of a 0.4 percent land transfer tax or a quarter-cent sales tax increase to help compensate for money taken away from counties in a deal to turn responsibility for paying Medicaid over to the state.
As a result of the budget deal, counties lost state-supplied school construction money this year and will lose some sales tax revenue in coming years.
According to county budget director Donna Coffey, the land transfer tax would yield a little more than $4 million in annual revenue, while the sales tax increase would yield just over $3 million.
Commissioners said they preferred the land transfer tax to the sales tax because of the regressive nature of a sales tax.
“I certainly think there are pros and cons in terms of impact, regardless of which one of these new taxes that we pursue, and there’s no way that we can completely insulate all of the people we care about in this county from this tax,†Commissioner Moses Carey said.
“While a lot of people think that sales tax is fairer, and that it’s going to touch everyone, and everyone is going to pay, I think that asking people to pay every day from current income, when they have no current income or when they have no increase in income … is a bit much.â€
Realtors have come out against the land transfer tax, saying it unfairly burdens a small population during a slow real estate market. Several county residents spoke against the land transfer tax, holding signs and wearing buttons opposing it.
“I prefer no new tax at all,†said Ryan Miller, an Orange County educator and part-time farmer. However: “I would support a sales tax. I would share the burden with all of the county residents, including our transient residents.â€
Others spoke in favor of the land transfer tax.
“I want to stress that the residents need to support services administered by the county,†county resident Margaret Misch said. “[The land transfer tax] is a reasonable solution to the funding needs and it does not place a burden on the less affluent who pay sales and income taxes.â€
In September, the board voted to put a tax referendum on May’s ballot rather than this past November’s ballot, expressing concern that there was insufficient time to educate the public. In October, the board formed a Local Revenue Options Education Advisory Committee to educate the public regarding the tax referendum.
The board on Tuesday also heard the results of a county-funded telephone poll, conducted by Hertzog Research, Feb. 6-13, to determine voter support for the land transfer and sales tax options.
The poll found that about 48 percent of likely voters said they would support a sales tax, while 43 percent said they would support a land transfer tax, if they had to choose between the two. According to Mark Hertzog of Hertzog Research, those results are “statistically a tie,†because of the poll’s four-percent margin of error.
A couple of clarifications.
First the most recent projections from Donna Coffey reduced the revenue expected from the Transfer Tax dramatically. It, like the sales tax, is now expected to generate a little over $3 million dollars.
Second, the Hertzog poll question referred to in this article presented a hypothetical situation that is no longer relevant to this election. It asked “If you had to chose” between the two … The decision by the BOCC Tuesday stripped the voters of that choice. They will have only the question of whether to approve the Transfer Tax.
The relevant question in the Hertzog poll for that situation resulted in 53% disapproval of the Transfer Tas, versus only 33% approval. Conversely, likely voters surveyed indicated majority approval of the restoration of the 0.25% sales tax by a margin of 50% to 32%.
If you do not sell your house, you will not pay the land transfer tax. Period. Within a year my wife and I will be buying our first house. We will sell it. I cannot tell you when but I do not plan on retiring here. I am 29. I would rather pay the transfer tax in the future then pay taxes on everything I purchase from now until the day I move.
Also, this area is growing. It will not grow at the same rate as it has been but it will continue to grow. We can make decisions that will make the growth easier on us. But we cannot stop the growth. A land transfer tax may make people think twice about moving here with the intent of moving again within 5 years. I rather have neighbors who care about the difficult issues we need to figure out instead of someone who is transient and does not care how much water they use or how busy the roads are getting.
Jamie, I respectfully disagree…
What about those people who have to sell their house for whatever reason, job, military, retirement, financial, etc. ?? Why should they have to pay more, especially if they are moving out of Orange County?
Why should people who only move from one side of the county to the other pay more just for the “privilege” to do so?
In this situation, they are not benefiting any more from county services, yet they have to pay more…
Your statements that people should think twice about moving here with the intent of moving again within 5 years and not having transient neighbors smacks of elitism and the typical “pull up the ladder, I’m on board” mentality that is so pervasive in society today.
I just bought my first house about 6 months ago. Got my mortgage from State Employees Credit Union – their first time buyer program. Didn’t use a Realtor and still was scrapping for every penny. So if, as the proponents say, the tax will be passed on to the buyer and not “paid” by the seller, I would have had a hard time coming up with that extra cash. Likewise, when I get ready to expand into a bigger house, I will need every penny then as well.
Good luck with buying your home. Perhaps your perspective on the transfer tax will change once you have experienced that process, perhaps not.
Either way, there are several options that are much more equitable, broad based ways to generate revenue. The Orange County Gang of 5 are too ignorant to understand that they have caused the current situation we are in. By eschewing solid economic development, spending beyond their means, and greatly restricting residential and commercial growth they have done everything in their power to kill the goose that lays the golden egg.
Certainly spending $100K to “educate” the citizens about why they should give more of their hard earned money to goverment to be used unwisely is not the answer…
I’m all for roads, parks, schools, etc. I just happen to think that everyone – regardless of whether they are selling property or not, should pay their fair share.
Taxing property sales, and I am assuming the type of property doesn’t matter- primary residence, investment property, commercial, is ONLY taxing those who have chosen to INVEST in real property. If you are going to tax that, you should tax when folks take money out of their IRA’s, retirement accounts and investment accounts. It is an investment, and usually the largest investment that people have. Bad tax!