Programming alert - Headline Saturday to examine land transfer tax battle

WRAL's Headline Saturday, the 30-minute weekly news magazine on Saturdays at 7:30 p.m., is going to focus on the Land Transfer Tax issue this week. Here's a link to the article on the N&O. The N&O helps them put the show on.

Link to N&O story

You gotta love this part of the article. Rep. Paul Stam was apparently saying that counties should pursue impact fees over the land transfer tax, even though he would certainly vote against them and counties have been trying for years any way to get impact fees:

Transfer taxes, which would affect all sales of homes and businesses, are an irrational way to target growth, Stam said. If the goal is to make growth pay more of its costs, he said, then "impact fees" on development would be more logical.

(NCACC spokesman Todd) McGee noted, however, that the General Assembly, where Stam is the Republican House leader, has denied counties the legal authority to impose impact fees, so that's not an option for them.

Comments

Another great quote from Stam

"People are not convinced that their counties really do need more money. On this particular tax, voters said this is not a fair tax anyway."

I know he's anti-tax, but now he's saying counties are no good?

Plus, the first part of the quote is not true any way because five counties did approve the local sales tax!

would someone please explain to me

what the hell the difference between "impact fees" and "transfer taxes" are? Besides the semantics?

Jeebus.


Be the change you wish to see in the world. --Gandhi

Teepak and Betsy 'splained it pretty well.

The practical undesirable result of the impact fee is that to be fair to the lower to mid market buyer, it has to be set so low that counties don't see nearly the revenue from an impact fee that they do from a TT. A half million dollar home with walls of windows, a massive water heater, four toilets, three showers, two tubs, a hot tub and an automatic sprinkler system has a much bigger impact on the county's infrastructure than a 1000sq ft starter/single parent home .. but with an impact fee you have to charge both buyers the same small impact fee.

Also, impact fees are not bondable, where TT's are seen as reliable and therefore bondable by financial institutions. For very rapidly growing areas that are really struggling to build fast enough to keep up, a TT at first would be used to push up their total bond cap (what a bank is willing to lend/buy based on the county's projected revenues). Without that TT, the only way a very rapidly growing county can raise it'sbond cap is to increase property taxes. Commissioners hands are tied now. They will HAVE to increase those taxes ... by property revaluation or by tax rate increases.

Like I said, Johnston county residents shot themselves in the foot voting against TTs. They basically said,

No, please tax ME to pay for new schools so the Home Ticks can keep their whole 6%, poor dears.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

So why is the impact fee a flat rate for all

homes? Seems like it should be tied to square footage or value with a cutoff minimum size/value under which the fee is waived.

Seems like it's either regressive or useless. Or am I missing something?

Person County Democrats

I actively oppose gerrymandering. Do you?

It's really just definition, persondem.

Taxes are fees based on a percentage of some value.

E.g., NC charges a fee for the privilege of driving a car via your license, your tags/registration and your inspection fees. But your local governments charge you a tax on your car. Rather than charge me two hundred a year for my bucket, they charge me a little bit because my 98 saturn with 197,000 miles on it barely has any blue book value at all. Then they charge the dude with the sweet little one year old Boxter a bit more cause his blue book value is slightly more than mine. [They may charge him more out of pure envy, too, but they'll never admit it.]

A Fee is a flat charge per item.
A Tax is a percentage charge on the value of an item.
Therefore, a sliding scale impact fee isn't a fee any more, it's a tax.

That's my laywoman's understanding, anyway. Shall we try the lotus position next? :)

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

So far we've kept our R rating for language

You trying to take us to an XXX site? :)

Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



***************************
Vote Democratic! The ass you save may be your own.

Mmm hmm ...

now we know where your mind is. ;) hee.

Yoga, Betsy. Yoga. Mental yoga.

My daughter tells me I shouldn't try to make jokes. :-\ Maybe she's right. I was trying to make a joke about twisting the brain around what I had just written.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

hehehe......I know yoga

:)

I'm just tired of erasing all the cuss words I usually let fly. Sigh. Not gonna make it.

Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



***************************
Vote Democratic! The ass you save may be your own.

Lotus position, ha!! - my knees don't work that way.

and I am not sure that I want them to.

Thank you for the info on fees and taxes. So by definition a fee has to be the same for all payers.

And so a small timer gets stuck with the same fee as some rich guy building a 4000 square foot monster.

btw - I have a 98 with 145k on it, and I thought I drove the hell out of it. You've got me by 50k; you sure do get around.

[edit - considering Betsy's post above that last bit doesn't sound so good. #winks# ]

Person County Democrats

I actively oppose gerrymandering. Do you?

exactly.

A Tax is a percentage charge on the value of an item.
Therefore, a sliding scale impact fee isn't a fee any more, it's a tax.

semantics.


Be the change you wish to see in the world. --Gandhi

Semantics, indeed.

Semantics, yoga, taxes, fees, all at 11:30 on Friday night. :) Y'all ... we've really got to slow down. This wild and crazy fast lane life is gonna kill me.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Bonds

To reinforce what Leslie said, a count's ability to bond and get good rates is based more on its revenue stream than what we would call "credit worthiness". Bond holders want to see the cash coming in. Without a broad based revenue stream with good dependable flow counties will pay more for their bonds no matter how frugal they are.

Gladly

It's not just semantics.

Impact fees are charged only on new construction. They are designed to recoup some of the 'impact' the new construction is causing on the local governments - i.e. more kids in schools, more cars on the roads, etc. It's a way to get growth to help pay for itself (although even with impact fees, it still doesn't).

The Land Transfer Tax would be paid when any real estate is sold - new construction or existing construction and commercial properties as well. 39 states have some sort of land transfer tax in place already, including North Carolina, which charges a 0.2 percent fee (called the Deed Stamp Tax) on real estate purchases.

Also....since LeslieH educated me

on this....

One negative thing about the impact fees is that they must be the exact same for each person/transaction across the board. Rich and poor pay the same. Somewhere we had a really good discussion going on where we figured a way to combine impact fees and a transfer tax to lessen the impact on fixed and low income homeowners. I'll try to find that, because Leslie did a great job explaining things.

Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



***************************
Vote Democratic! The ass you save may be your own.

The combination thing

was your idea. My rememberer doesn't work so well sometimes, but I think it involved combining a moderate impact fee on each newly constructed structure along with a reasonable transfer tax but with a generous homestead exemption of around $150k or so, didn't it?

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

That sounds about right

It might have been my idee....I didn't really know what I was talking about :)



***************************
Vote Democratic! The ass you save may be your own.

Another twist: APFO

APFOs or Adequate Public Facility Ordinances are similar to impact fees but different. Impact fees require approval of the General Assembly. APFOs are a jurisdiction's way of saying that they can't pay for rapid growth so everything has to slow down. However, if a developer wants to voluntarily advance some of the money needed to provide infrastructure for his/her development they can skip to the head of the line. It does not require approval of the General Assembly. Union has used APFO but it has been challenged in court and its status is as yet unresolved.

Good point.

APFO is the heavy duty really cool weapon in a municipality or county's bag. Putting one of them suckers in place gives "knotted knickers" a whole new definition in the real estate and housing industry. ha!! :-)

Greg, who brought that suit against Union? NCAR? Homebuilders Assoc.?

Don't you know THAT would be a good way to drain the Home Ticks bank accounts ... pass an APFO in every county they snail-spammed or robo-called last month. The attorneys fees alone might cause the strangle hold the Home Ticks have on the Senate to loosen up a little.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Union suit

There are two suits filed by local developers/home builders. One is supported by NC Home Builders but I don't know the extent of their involvement. I don't think realtors are involved. (They get 6% of any increased price). What's interesting is that they based the suit partly on a bogus report by industry apologist Donald Jud. I'll be writing about this in depth later but in a nutshell they claim that growth pays for itself by using arbitrary multipliers to overstate indirect economic benefits as direct benefits and understating governments costs using the discredited right-wing TABOR population+inflation argument. I hope the attorneys pull this report apart and expose the fallacies.

How do the REAL good guys

get somebody on these damn spin-a-rama political shows? Are they all produced by somebody who used to work or wants to work at Civitas?

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

According to the article,

According to the article, somebody from the County Commissioner's Association is going to be on the show with Stam.

rich folks want an impact fee

because it does not effect them as much as a transfer tax would. Or at least that is the perception. Wait till the county has to raise the county tax rate and see how it effects them!

A rich person will expect to have police, fire, emergency, nice roads, lighted streets, good schools, etc, but expect to pay the same money as someone who is living in a single wide trailer at the other end of the county. Let a fire happen at that trailer and in a gated community and see how much the rich folks will demand the fire department come to their area first at the expense of the single wide guy.

Rich people will say that they pay more in their property taxes. Sorry, but depending on what you have in your house determines what your property taxes are. The rate is the same. I have a copy of the itemized property tax. This document is on a computer print out 11 X 17 fan-fold paper. It is about 3" thick. It will give you a tax rate on just about everything a person could have on their property. From land use, to size of house, to rooms, to bathrooms etc. Each thing has a rate associated. As you have more things, more of these conditions are applicable to you and your tax is calculated accordingly. Everyone pays the same tax rate, its just based on this bigger thing is all.

Poor people could care less which they have to pay....A poor person is not going to buy a $500,000 home. Some poor people will never buy a home. There are some cities in NC that have 35% and more of there population in rental properties. These people still vote though.

Impact fees or transfer fees, who cares. to many folks are not going to pay either of these.

In a previous posting, I mentioned that on a 1% transfer tax rate, over 30 years, each $100,000 on the price of your house will raise your mortgage payment up by $3 and change. On a 1 million dollar home, that would mean your paying an additional $33 a month or so....the mortgage for a 1million is in the $4,700 to $5,100 a month range. What is $33 to that mortgage?

WRAL video online

The show has already been posted online.

Stam gets the award

for mental yoga today. He's a master. Even Crabtree was looking at him like he had two heads when he tried to repeat some of the NCAR fantasies ... "the area might stop growing." eh? "People might "trade" houses." wha?

How old is Stam? Man ... I would NOT want to be the kid who has to tell the guy there is, in reality, no Tooth Fairy.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Fantasy

The biggest fantasy is that population+inflation canard that gets repeated over and over. The smirk on Stam's face when he repeats it shows he knows it's semantic trickery.

The segments of the population depending on government services (old+young) are generally increasing at a faster rate than the general population. The costs of services provided by government increase at higher rates than consumer inflation. Unfunded mandates have been increasing (NCLB). The costs of constructing facilities to provide public services (police, fire stations, schools) have had inflation rates many times that of CPI.

Every time I see Stam speak

I feel embarrassed that the General Assembly is filled with people like him . . . people who think this is all a big freaking game.

Just wondering

But did Stam say anything that was remotely a legitimate argument against the LTT? All he basically said was that homebuilders pay enough taxes that homeowners shouldn't pay any, that if a person has to sell his house at a loss, well, he shouldn't have to pay the tax, that a county budget should not grow faster than population and inflation, etc. Give me a break.

Nothing legitimate that I can tell

Stam is a con man. He hates government, except when it helps guys like him make money . . . which is probably why he's a real estate lawyer in bed with the John Locke Foundation.

That's sort of like being a Puppet parasite on a Realtor Tick. Creepy.