Monday, April 30, 2018

Davidson Budget: It's time to cut the Mi-Connection tax!

Since its inception, the decision by Davidson and Mooresville to form a cable company has been an unmitigated financial disaster for the towns.  The impacts of the company (originally called Mi-Connection and now Continuum) on town budgets has been particularly acute in Davidson where it has been the primary driver for the town having property tax rates as much as 40% higher than its neighbors and a solid waste fee (aka the trash fee, aka the Mi-Connection tax) of $201 where the fee in Huntersville is just $72 and the fee in Cornelius is zero.

The solid waste fee is particularly onerous and has been a wound salting consequence of the Mi-Connection decision.  It is a regressive fee, hitting low income residents harder than others.  Also, it was not implemented correctly, and people who qualified for exemptions did not receive them - a fact recently uncovered by Save Davidson.  The fee implemented in FY2011 came at the height if Mi-Connection subsidies when these subsidies reached nearly a quarter of the overall general fund budget.

Prior to the fee, trash service was included in the property taxes levied by the town.  Once implemented, the fee freed up money in the Town general fund that has been diverted to paying these cable company subsidies.

With Town coffers full and the Town proposing a FY2019 budget including a 7.15% spending increase, now is time for Davidson's new Board to cut this Mi-Connection tax.  This can be done - easily.  Taxpayers also need to understand this.  If taxes aren't cut when times are good, they never will be.

Where would this money come from in the new budget?

The Town is sitting on millions in taxpayer money held in various pools called fund balances.  Check the latest Finance Department numbers here.

The proposed budget also includes $400,000 towards the Public Facilities capital improvement fund.  This is the fund for the new Town Hall.  Town staff described putting this extra money aside as a way to "carve" a place in the budget for future debt payments on this project.

Here is the thing about such carving.  Besides the fact it us being carved out of your wallet,  it is for debt the town has not even agreed to take on yet.  This Board has strongly indicated they want this project debt to go before the voters in a referendum this fall.  Putting a carve out for this debt in the budget now totally undermines the spirit of putting the question before the voters.

Rather than doing this carve out and making a sham of a potential November referendum, the Town should use this $400,000 in excess money to cut the solid waste fee in half. 

This would bring the fee to $100 per single family household - making it more in line with Huntersville which is currently at $72.  Importantly, this could be done while still fully funding the needed increases to Fire and Police included in the proposed budget.  It also doesn't touch the fund balance in the solid waste fund which currently sits at roughly 40% of annual solid waste expenses.

Cutting this fee now is the right thing to do.  It would show the new Board is serious about addressing the Mi-Connection (Continuum) issue and its impact on the town.  It would show the Board is serious about addressing affordability by reducing a regressive fee.  It would show the Board is serious about truly listening to the voters before making capital spending decisions like those for a new Town Hall.

Here's hoping the Board takes these things seriously.

Readers can contact the Board at to ask them about the budget.  The public hearing on the budget is set for next week at the May 8th Board meeting.

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