February 7, 2008

How to Ruin a Good Report

Last year I wrote about the John Locke Foundation's report on local tax burnens. Now a local paper has chosen to distort the report again.
To the editor of the Coastland Times.
Your recent editorial about tax burdens in Dare County did a great disservice to the John Locke Foundation that produced the report and the Dare County local governments you characterize as producing the highest tax burdens in North Carolina. Dare County governments have high per person tax ratios not from wasteful spending as you suggest but from the county's low permanent population, high percentage of non resident property owners and tax contributions of our summer visitors.
The John Locke Foundation did a good job with the report. Their methodology is simple. They look at local government revenues, property tax, sales tax and total revenues. They then divide the revenue by the permanent population for the jurisdiction. This methodology assumes that all the revenue is paid by people counted in the population figure. For the resort counties like Dare, Currituck, Hyde and Brunswick a large share of the property taxes are paid by non resident owners while sales and occupancy taxes are paid by our visitors. Both these groups are not included in the population number. Not surprisingly those are the very counties that score highest in the report. Coastal resort communities consistently hold the top places for towns as well. Kill Devil Hills, Oak Island, Carolina Beach top one list. Nags Head, Manteo and Kitty Hawk are joined by Surf City, Wrighsville Beach and the mountain resort Blowing Rock on the next. The pattern is clear. Resort communities, especially coastal communities have high per capita tax revenues and low census populations. In your editorial you ignore this pattern and unfairly compare Dare County tax numbers with those across the state ignoring the obvious factors that create this anomaly. You wrote:
What the latest study demonstrates is that property tax rates alone can be deceiving even in towns such as Southern Shores and Duck that trumpet theirs as lowest in the county. It is the sum total of the locality's cost versus the value and how many people are available to to pay them that is most significant.
What you don't say is that the report didn't actually count "how many people are available to pay them”. Your misrepresentation of the report is made more flagrant by the simple fact that the report recognizes, explains and discounts the resort community results. The report states plainly that resort communities don't fit the tests used in the report. The disclaimer you that either didn't read or chose to ignore was on the FIRST PAGE of the report. Here is what the John locke Foundation said about why resort towns and counties topped the list
Readers will immediately notice the relatively high per-capita property taxes in many resort communities in North Carolina. Given the nature of the data, this is not surprising. Second homes and resorts certainly do appear on local tax registers. However, because owners or renters only rarely live in these dwellings year-round, such localities typically have small permanent populations. High tax values divided by a small permanent population will produce a high per-capita tax burden. Therefore, these numbers are not necessarily comparable to other tax-burden statistics.[emphasis added]

The John Locke Foundation chose to issue a disclaimer about numbers for Dare County's local governments. Either you didn't read the report and chose to report the dramatic sound bite rather than provide an accurate analysis or you saw the disclaimer but chose to ignore it because it didn't fit your particular agenda. Either way you destroy your credibility and insult your readers by presenting a slanted version of the report. If you find "high salaries, fancy facilities and big budgets" then say so and provide the evidence to support your claims but don't distort the truth to trash local governments when its not deserved. Your readers and the public servants you insult deserve better.


At 8:40 AM, Blogger David S. said...

Good job! I was dumbfounded how distorted those numbers appeared. I find it hard to believe a newspaper editor could miss the significance of the difference involved in our tourism based economy.

Thanks for creating this post. With your permission I intend to link my blog to your post.

At 1:23 PM, Blogger TheRealOBX said...

I have not read the entire report. I will not lie. Just a quick point that hit me as I was reading it.

From Wilkipedia:
The median income for a household in the county was $42,411, and the median income for a family was $49,302. Males had a median income of $31,240 versus $24,318 for females. The per capita income for the county was $23,614. About 5.50% of families and 8.00% of the population were below the poverty line, including 9.90% of those under age 18 and 5.30% of those age 65 or over.

From Hampton Roads.com
Davis, 54, has served with the Kill Devil Hills Police Department since 1996 and earns $92,423 a year. Grant, 39, has been with the department since 1989 and makes $75,555 annually. Davis said he could not discuss the suspension.

Wasteful government spending may not play any role but looks like those 2 salaries are a little off the chart for Dare County citizens.

Just my .02 from my libertarian leaning window on the OB

The Real Outer Banks

At 4:40 PM, Blogger BOBXNC said...

I didn't say there wasn't wasteful spending just that per capita numbers aren't useful in resort communities. I don't see how talking about senior managers is particularly relevant. I have expressed no opinion on KDH salaries. In the future please try to make your comments relevant or at least comprehensible!


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