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

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CCM Economics, LLC Orange County Tax Equity Page 20 jurisdiction pays that amount of tax—it is an average amount paid by each citizen of that jurisdiction. For example, there is a tax on beer and wine that collected $259,654 dollars in the 2015 fiscal year for Orange County. Since the county population is 140,144, this means on average each citizen paid $1.85 in beer and wine tax. Of course, if a citizen did not purchase any wine or beer, then they would not have paid the tax. Furthermore, it was necessary to examine each revenue and expenditure amount in detail to assign it to the proper locality. For example, the Chapel Hill transit system collected revenue of $19.322 million in the 2016 fiscal year. If one was to simply divide this amount by the number of residents, it would appear that Chapel Hill residents paid $324.37 per capita for transit service. However, closer examination of the revenues shows that large portions of the revenue comes from sources outside Chapel Hill. For example, the Chapel Hill transit system also received $3.3 million in state and federal grants, $1.540 million from the town of Carrboro, and $7.919 million from UNC.11 In short, approximately $12.8 million of transit system revenues are from outside sources.12 Determining benefits received consisted of several different activities. The budgets were examined to determine where certain monies were spent and on which localities. A second method of determining benefits used was an online survey. Postcards were mailed to 1,000 randomly selected addresses with a link to the survey. Furthermore, the link was distributed to residents via email, facebook, and other methods. A total of 478 responses were received. Benefits and taxes were then compared on a per capita basis by location. This was easier for some taxes and benefits than for others. For example, the county has excellent records on 11 UNC is of course funded to a large degree by federal and state tax dollars and grants. 12 Since a large portion of tax dollars paid to federal and state government is returned to counties and cities, it helps to know the value of taxes paid to federal and state governments. Without this accounting, it would appear that local government provided good and services are cheaper than they actually are which is a shortcoming of the 1989 Wicker study. 57