 National Association of Counties * Washington, D.C. Vol. 31, No. 9 * May 10, 1999 Previous story | Table of Contents | Next story New growth, declining revenue
Despite an overall healthy economy, one-third of the counties in the United States say they raised property taxes during each of the past three years to meet growing expenditures, according to a recent NACo survey. "Our expenses just seem to keep increasing," said Mercer County (Mo.) Clerk Carolyn Kost. "We raised our property tax for the simple fact that we needed more revenue." The county also needed more revenue to cover $35,000 in state-mandated raises for elected officials, she noted. "More than likely, we’ll have to raise taxes or cut services this year," he said. The county, with a population of 3,720, lies about 100 miles north of Amarillo in the Texas panhandle. It employees 65 people, including 14 in law enforcement who patrol the 30 square-mile county. Even though property taxes have increased in the past three years in Pocohontas County, Iowa, its county auditor, Margene Bunda, says they are still lower than surrounding counties "by a long shot." "It’s a bit of a struggle in the rural areas," she said. "This is the price we pay for living here."
Fifty-one percent of the counties responded that the property tax increases were necessary to provide funding for new growth and 41 percent indicated that the tax increases were necessary because of a declining revenue base. Fifty-three of the 93 counties that have a declining revenue base have populations below 10,000. "The survey presents a true picture of what the nation’s 3,068 counties are facing," said Betty Lou Ward, NACo president and commissioner from Wake County, N.C. "Some are doing well, while others are hurting and having to raise taxes. Our great concern is for those smaller, rural counties that are seeing their revenue bases decline. NACo’s Rural Action Caucus will take a careful look at these results to determine how we can help these counties." The counties that participated in the survey expressed a positive outlook despite being wary of increased costs coming from federal and state government. Eighty-six percent said their county is healthy or somewhat healthy. In addition, 77 percent are either very optimistic or somewhat optimistic about their county’s financial health for the next five years. However, 55 percent said they are somewhat unprepared or not at all prepared to take on additional responsibilities that may be passed down from federal or state government. Of the counties that reported a property tax increase in 1998, the majority (57 percent) raised taxes between 1 percent and 5 percent. Fourteen percent said they raised taxes between 6 percent and 10 percent, while only 7.5 percent increased taxes more than 10 percent. In an effort to develop new revenue sources, 35 percent have implemented fees in the last three years. Eighteen percent have implemented sales taxes or added local option sales taxes during this period. Fifty-two of the 89 counties that added sales taxes have populations below 25,000. Only 41 percent of the responding counties indicated that their fiscal condition had somewhat improved during the last year, while 36 percent saw no change. Sixty-nine of the 203 counties that say their fiscal conditions have improved have populations between 10,000 and 25,000. When asked about the changing fiscal conditions over the last three years, 45 percent said it has improved, while 12 percent reported it had significantly improved. Twenty-four percent saw no change and 16 percent saw deterioration with an additional 2 percent reporting significant deterioration. The population of the 500 counties surveyed closely correlate to the population breakdown of counties nationwide. The counties are also geographically diverse: 37 in the Northeast, 178 in the South, 178 in the Northwest and 107 in the West. |