Mayor Bell recently suggested using $187,000 of city general funds annually to reduce the 7% tax increase on the proposed downtown Business Improvement District (BID). Bell says, “I’m only throwing this out for discussion, not asking for buy-in.” The discussion on the BID needs to be around this question: “Why do we need a Business Improvement District in the first place?”
The folks that are backing the BID are stating that there is not enough tax revenue to pay for all that needs to be done downtown.
While I give them credit for suggesting a self-imposed tax, they – and Mayor Bell in particular – would do well to remember some basic fundamentals of economics: In order to increase tax revenue, you focus on increasing the tax base not the tax rate.
Durham is currently one of the highest taxed cities in the state. If you continue to increase taxes, residents and businesses alike are going to start leaving our fair city. And the inverse is also true. If we were to make our taxes lower than the surrounding cities, then we would attract more residents and businesses to move to Durham.
So by attracting more residents and businesses to Durham you are increasing the tax base … you have that many more people and/or businesses paying taxes. If you increase the tax rate, you’ll see people and businesses leaving Durham for a city that has lower taxes.
Therefore, increasing the tax rate will shrink the tax base.
Employers downtown should not have to subject themselves to higher taxes. Bell should take a leadership role and hold the city administration accountable to fiscal responsibility. The employers and citizens of Durham should receive the services that our taxes are intended to support.
More importantly, however, is the fact that Mayor Bell’s proposal is taxing the rest of Durham and directing that revenue downtown. Aren’t the neighborhoods surrounding downtown in more pressing need of these dollars? If the city can do without this $187,000 then the money needs to be directed to the greatest need, which is not hiring downtown “ambassadors.”
Durham’s downtown resurgence serves as a source of pride for our city.
It has not only resulted in jobs for our citizens but ignited the entrepreneurial spirit that defines Durham.
The residents of Durham deserve better from our elected officials. How can we continually ask our citizens and/or business owners to dig deeper into their budgets to pay more for services that should already be provided by a city with one of the highest tax rates in the state?
I pray that our City Council doesn’t proceed with the creation of the BID.
Moreover, I pray that our City Council doesn’t redirect money that could be used to help those in need. We don’t need a BID.
We need a leader who can cut taxes so business owners can afford to hire more employees.
Chairman, Durham County Republican Party