On November 4th, New Hanover County residents will vote on a $160 million school bond. The proposed bond will help address a number of needs that New Hanover County Schools is facing – Safety, Technology and Growth. Today, I want to talk about taxes and what passing this bond means to your bottom line.
Any bond has a potential tax impact. Over the life of this bond, the average tax impact is estimated to be about 3 cents on the tax rate. What does this mean for a homeowner in New Hanover County? If you own a home valued at $200,000, the estimated tax impact would be $60 per year or about $1.15 per week – less than the price of a small cup of Starbucks coffee.
A look back at previous school bonds provides some interesting insights. Going back to 1995, we have approved bonds that had potential tax implications. However, there was no actual tax increase enacted. This does not mean there won’t be one now, but it does show that impact may not be as great as shown on the ballot. Additionally, the current school bond debt is decreasing considerably. This year alone the payment of past bonds has decreased by $911,471.
There are a number of factors that can mitigate the tax impact. One of these is property values. If property values increase, then the tax rate could be lower. The county is currently doing a major revaluation that could affect the tax rate. After the recent recession, it would not be unreasonable to anticipate property values increasing. Another factor that affects the tax rate is the general financial health of the county. New Hanover County has a very conservative debt policy that limits the amount of debt the county can carry. This conservative approach has helped the county achieve an AAA bond rating. This is the highest rating possible and one that only a few counties in the state possess. The Local Government Commission sets the limit each county can borrow and New Hanover County is well below that limit.
The New Hanover County Board of Commissioners and the New Hanover County Board of Education have been very frugal with the taxpayers’ dollars. Thus, the credit rating for our county is very good, which keeps the bond rates very low. Therefore, the impact on the taxpayer for this bond should be minimal.