JLF’s research team has just released a new study of recent spending trends in North Carolina’s cities and counties. Here’s a release summarizing the findings for Wilmington, New Hanover, and other Southeastern NC communities. A key passage:
Among county governments, Onslow had the state’s No. 5 revenue growth rate from 2002 to 2007, adjusting for inflation and population growth. Onslow’s revenues grew by 35 percent, and a family of four needed an extra $899 to cover those costs.
In contrast, New Hanover County’s 5 percent revenue growth rate ranked No. 87 out of 98 counties included in the report.
The average county increased revenues by 13 percent beyond the rate of inflation and population growth from 2002 to 2007. For other area counties, Pender ranked No. 8 (32 percent revenue growth beyond inflation plus population); Columbus, No. 15 (29 percent); and Brunswick, No. 43 (17 percent).
“The current economic recession has left many North Carolina cities and counties strapped for money,” said report co-author Joseph Coletti, JLF Fiscal Policy Analyst. “As economic activity declines, sales taxes, fees, and other revenue sources decline.”
“Many city councils and county commissions are considering ways to increase taxes, a very bad idea during the recession,” added co-author Dr. Michael Sanera, JLF Research Director and Local Government Analyst. “Others are asking the federal government to bail them out. Our report shows that many North Carolina cities and counties have only themselves to blame.”
Before the recession, these local governments spent money faster than population growth and inflation would warrant, Sanera said. “Instead of cutting taxes, they started or expanded unnecessary or low-priority projects.”
Governments should follow the same familiar advice: watch your expenses carefully, fund the basics first, don’t buy unnecessary things, save for a rainy day.
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