June 17, 2013

Statement of the Durham People's Alliance Regarding Issues in the 2013-14 Budget of the City of Durham Durham People's Alliance advocated a small property tax increase to cover the City's budget shortfall for residential garbage pickup and also urged no change in basic bus fares. We respectfully opposed the City Manager's proposal to fix the former with a new garbage fee of $1.50 per month ($18.00/year). The City Council heard us and others very well regarding bus fares, but a majority of the Council took the wrong path in our view by adopting the manager's garbage fee and then increasing it to help maintain existing bus fares. In a Council work session that effectively finalized the budget, a majority of the Council supported the Mayor's proposal to increase the garbage fee to $1.80 per month ($21.60/year) and use the revenues thus freed up in the Solid Waste Department to cover most of the hole in transit finances. Durham People's Alliance continues to believe that garbage service should have been covered with a property tax in-crease of slightly more than a half cent ($0.0052 per $100 of property value). We would have supported increasing that rate to $0.0063 to also cover the bus service shortfall. No one likes property tax increases, but what would a rate increase of $0.0063 per $100 of value have actually meant for Durham homeowners? Instead of $21.60 a year in garbage fees, the owner of a home valued at $100,000 would have paid $6.30. The owner of a $200,000 home would have paid $12.60. The owner of a $300,000 home would have paid $18.90. Obviously, the property tax is more progressive in the economic sense than a flat fee. It tracks property wealth. The garbage fee, like all broadly applied flat fees, is regressive. It will take a larger percentage of income from a Durham resident the lower that person's income is. And since the new fee will be added to city water bills, it will worsen the problem that at least some low-income citi-zens face in paying on time and maintaining service. These already hard-pressed people include families that rent houses or rent apartments in buildings of four units or fewer. For these and other reasons, progressivity in taxation is a core liberal principle that People's Alliance strongly sup-ports, and always will. We support this principle regardless of the amount of money involved, and always will. But we also recognize that conservative legislators in Washington and in Raleigh are working to starve local govern-ments of the federal and state aid they need. It is becoming increasingly difficult for city and county governments to deliver basic services at a reasonable cost to the public. In fact, part of the agenda of conservative elites is to force local governments to increase sales taxes, fees, and property taxes if they want to maintain decent public services. Durham People's Alliance urges the City Council to publicly identify this agenda as the cause of its fiscal problems and a major cause of the resulting social problems it has to deal with. We would welcome opportunities to support local leaders in calling for progressive taxation at the federal and state levels and for more financial assistance from those governments for local needs. A fairer federal and state tax struc-ture would allow us to avoid the painful choice of fees versus property taxes in paying for basic city services.