7-a - Report on the Orange County Tax Equity Study

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CCM Economics, LLC Orange County Tax Equity Page 10 An examination of the Orange County budget helps to illustrate the complexity of the tax equity issue. The county collected $202.832 million in revenue from an assortment of taxes, licensing fees, service charges, interest on earnings, and intergovernmental grants. The county received $20.7 million in intergovernmental grants for different functions such as social services, transportation, enforcement of child support, etc. Taxes were on a variety of different things including property, motor vehicles, and retail sales just to name a few. In the 2015 fiscal year, these taxes totaled $166.1 million while licensing fees brought in $331,510—only 0.16% of total Orange County revenue. Figure 5 presents Orange County government revenues by category. As one can clearly see, the majority of tax revenue, 92%, for the county comes from property and sales taxes and intergovernmental grants from higher level governments such as the federal government and the state of North Carolina. Of course, tax money from the federal and state governments that gets shifted to local governments comes primarily from income and sales taxes.9 In essence, Orange County citizens are paying federal and state income taxes of which a portion of these tax revenues are then shifted down to the county government level as if there had been a ‘county level income tax’. 9 Approximately 87% of the state of North Carolina’s tax revenue is from income and sales taxes . 47