5-Year improvement plan leads to property tax increase

Property taxes were raised from 33.25 to 37.00 percent this past fiscal year in order to help pay for the costs of Wilmington’s 5-year Improvement Plan.

On July 19, 2012, Wilmington developed a plan that will fix nearly all of the infrastructure problems throughout the city and New Hanover County. Wilmington’s 5-year Improvement Plan is a proposal to enhance and upgrade the streets, parks and recreation, and public facilities.

The Improvement Plan has a costly price attached to it, starting at $41 million. This has resulted in an increase on the citizens’ property tax of about 3.75 percent.

Cam Griffin, the budget director for New Hanover County, describes the 5-year Improvement Plan to be an, “allocated revenue stream to fund capital needs—primarily streets sidewalks, and some parks.”

Griffin says that the intentions of the plan are to upgrade the problematic sections, like the streets and sidewalks, that make up the city of Wilmington. In order to do this, the city has created a budget specifically for these needs and improvements. 

One of the many 'sidewalk closed' signs in downtown Wilmington used to stop people from entering construction zones, specifically due to the Improvement Plan. This was seen last Saturday and will stay posted until the construction is complete.

The budget for this project was approved in a City Council meeting on July 19, 2012 and a reevaluation of the taxes was made. The costs run up to an average of $41 million —this is a little over $8 million extra per year for five years.

Malissa Talbert, the communications manager for the city, broke up the costs that the $41 million entails. $35.2 million is going towards the streets and sidewalks, $4.2 million towards the parks and recreations, and $1.7 million is going towards public facilities.

Griffin says that the high cost was aggressive, but it is possible for the city. New Hanover County has stood behind the city in organizing this plan. All of the city residents are also county residents, so the same benefits will occur for everyone.

Lynn Heim, the budget director for the city of Wilmington states that they looked at borrowing money and at the costs that were already accumulated.

Wilmington previously had a 5-year capital plan and they used that prior knowledge to approximate how much they would need to spend. The plan is an 80/20 plan, which means that 80 percent  of the funds will pay off the borrowed debt and 20 percent will pay for the project itself.

In summary, the plan is being paid for by accumulating debt and raising the property taxes for citizens. Heim claims that the taxes rose from 33.25 to 37.00 percent. That increase went into effect for the fiscal year of 2013, which started on July 1, 2012 and ran to June 30, 2013.

Dependent upon the value of the citizen’s property, households can end up paying more or less in property taxes.

Heim states, “If a property rate went down, it is a possibility that they might pay a higher rate of tax.”

 

The property tax rate is now 45 cents per $100 of valued property. That 45 cents is a 3 cents increase per $100 from previous years. For example, a $200,000 valued house will most likely raise about $6,000 in property taxes based upon this increase.

Heim says that about half of the citizens will end up paying a higher property tax rate, while the other half will pay a lower tax rate. This is all dependent upon what the citizens’ property rate was reevaluated at.

This creates a concern for the citizens of Wilmington, but Heim says that most of the property values went down or stayed the same; therefore not many citizens end up paying more.

Talbert also explains that the tax raise is, “necessary for dedicated results, which is primarily for the maintenance and the new infrastructure.”

Lesia Heltzel, who has lived in New Hanover County her whole life, says the city does not do a proper job of informing the citizens of their plans. She was only somewhat aware that there was a tax increase due to the Improvement Plan. She views the Improvement Plan in both a positive and negative way.

“It is good for the city if it’ll provide more services, but bad if it is throwing the debt load on taxpayers,” she says. 

City administrations believe that the positive effects of the plan outweigh any potentially negative effects, such as tax increases. Jim Diepenbrock for the department of planning, development and transportation of the city of Wilmington, supports the plan.

Traffic is backed up on Randall Parkway due to the widening of the road, as seen by the city-posted sign. This was taken on Tuesday and the traffic will continue to be heavy until the infrastructure improvements are completed.

“It is very beneficial. We don’t have anything that has been approved for future development. It is very thorough and comprehensive; it can’t really do anything but help,” he says.

He states that one of the major benefits of the plan is that it is intended to be relevant for much longer than five years.

“It looks at things like stimulating the economy and addressing demographic changes both locally and nationally,” Diepenbrock says.

Heltzel claims that the city focuses on bringing in temporary jobs, like construction, versus permanent ones, such as bringing in a new industry. The creation of jobs, which will be mostly construction, will be a big help to the city, but she believes that it will only be temporary.

Citizens have wanted the local infrastructure to be upgraded and improved, and the city is making that happen. Unfortunately, both county and city members agree that there needs to be a tax raise in order to advance Wilmington.

During reevaluation years, it is possible that the tax rate can be adjusted. The 2013-2014 budget was approved on June 18, 2013 and no property tax was lowered.