As New Hanover and Onslow commissioners struggle with budget challenges — and try to convince local voters to support tax-hike referenda to be held next month — Brunswick County is looking at a deficit exceeding $10 million. While tax hikes do not appear to be on the table for the county commission, which has offered “better service with less government” as a goal for next year, commissioners are considering a $175 “household waste-management fee” to avoid some layoffs.
So, what’s the difference between a tax and a fee? To taxpayers, it often feels like a distinction without a difference. They lose money they would otherwise be able to spend or save at their discretion. Generally speaking, a tax is levied for general purposes, based on some economic activity engaged in by the taxpayer, while a fee is levied in exchange for a particular good or service.
I’ve always thought that it’s easier to maintain the distinction by focusing less on the method of collection and more on how the revenue is spent. In a CJ column, I argued that state and local government services can be divided into two categories: entitlements, financed by taxes, and enterprises, financed by fees. In Brunswick’ case, commissioners should impose a waste-management fee only if it is justified by the cost of providing that service, not as a substitute for general taxation.
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