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Carnes column: VTIL understating town’s property-tax burden

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Guest columnist Brian Carnes represents District 7 (northern Indian Land) on the Lancaster County Council.

As an elected official, I have tried to maintain neutrality in my comments about Indian Land incorporation. To incorporate or to not incorporate is an issue that needs to be decided by the voters within the proposed incorporation area.  
However, I do feel that the information presented to the public needs to be accurate. In conversations with Voters for a Town of Indian Land (VTIL) members going back to 2015, I have pointed out that the budget needed to be realistic and information needs to be presented accurately.
In his guest column last week headlined “VTIL: Much of town’s budget would be taxes we already pay,” Domenic Musco states that $1.8 million from local option sales tax (LOST) revenue would help supplement the new town’s budget.
One key requirement that Mr. Musco missed or does not understand is that LOST funds come in two different types of payment to a county or municipality. The largest component must be used as a credit against property taxes (LOST credit). The other component (LOST revenue) can be used as revenue in a county’s or municipality’s budget.
Let’s examine how the LOST funds should be properly budgeted.
First, here a breakdown of the budget estimate from the VTIL website:
Projected costs include $1.2 million for law enforcement, $1.5 million for fire service, $700,000 for parks and recreation, $250,000 for legal services, $1.8 million for contingencies and facilities, $1.2 million for planning and zoning, $300,000 for finance, $500,000 for administration and $350,000 for council and contract services, for a total of $7.7 million in costs. (That actually adds up to $7.8 million.)
VTIL’s revenue projections include $1.8 million from the local option sales tax, $400,000 from the local government fund, $2.2 million from building permit fees, $500,000 from business license/franchise fees, $300,000 from hospitality taxes, $600,000 from personal property taxes, and $2.1 million from real estate property taxes, for a total revenue of $7.9 million.
VTIL’s budget thus claims a surplus of $200,000. (With the $100,000 increase to its cost total, its surplus should actually be $100,000.)
But an accurate accounting of the way LOST works, as I described above, would result in the following changes to the revenue side of VTIL’s budget. The LOST revenue would be $900,000 (taking place of the $1.8 million in LOST revenue VTIL budgeted). And there would actually be a $1.8 million reduction in property tax revenue from the LOST credit, which VTIL’s budget does not include.
How do these two changes affect the bottom line? To bring in the same total of $7.9 million in revenue, with the same $100,000 surplus, the town’s budget would require $4.8 million in real estate property tax revenue, not $2.1 million as VTIL’s website projects. Eliminating the surplus would still require $4.7 million in real estate property taxes, more than twice VTIL’s current estimate.
Mr. Musco’s premise that the town of Indian Land could keep taxes we already pay is correct. But he does not account for the higher property taxes that property owners would have to pay in order to keep those taxes in Indian Land.
Whether to incorporate or to not incorporate has drawn strong opinions on each side of the issue. Doing what’s right and presenting facts in their entirety is what our community deserves. As we move toward a vote, let’s all do the right thing and present the truth, the whole truth and nothing but the truth. Not doing so is a disservice to our community!