County commissioners and school officials met Wednesday to discuss what exactly the county can afford to spend on building new schools and renovating existing ones -- and just how much they can increase property taxes to pay for them.
There are two possible scenarios.
The first plan involves a $4.2 billion bond referendum -- spread out into three referendums over the next decade -- that would convert several existing schools to a year-round schedule. That means a homeowner would pay about $1,010 more a year by 2016 on a $200,000 house.
The second option, a $5.6 billion bond -- also spread out into three referendums over 10 years -- would maintain the current percentage of year-round schools and build more traditional and year-round calendar schools. Under this plan, for example, homeowners of a $200,000 house would pay $1,182 more in property taxes a year by 2016.
"It would be a very expensive proposition," said Wake County Commission Chairman Tony Gurley.
Gurley said he is already talking with school board members about how they can reduce the bond amounts.
"One of our goals is 92 percent of students in permanent seats," Gurley said. "How fast you achieve that goal could determine the ultimate cost of the bond."
But some board of education members believe asking such an increase in taxes from Wake County residents would not be an issue if the area did a better job of controlling growth.
"The numbers of students we are seeing come to our school system is beyond our ability to absorb," said school board member Beverley Clark.
Other critics at the meeting Wednesday said that a tax increase would cripple low-income families, but county leaders stressed that deciding how much money to ask voters to support is just in the beginning stages.
"I think part of what today was, is to get the numbers on the table and give the public a chance to react and public leaders a chance to see what it means from a capital and operating perspective," said Wake County Manager David Cooke.
Many observers hoped that the North Carolina Education Lottery, set to begin in April, would make a big impact on school construction, but leaders said the expected $9 million the school system is expected to receive in the first few years of the lottery would only be enough to cover half the cost to build one elementary school.
With 67 percent of Wake County residents not having children in the school system, the Greater Raleigh Chamber of Commerce will start surveying residents to find out just how much of a bond issue they would support.
The results will help county leaders determine how much of a bond will go on the November ballot.
Property Tax Impact
If approved, the property tax increase to accommodate student growth in schools could also mean even higher taxes once Wake County reassesses property values in 2008. A tax rate hike could increase the amount they pay because schools have a direct impact on property values.
But, the question many people have is what kind of impact will paying for more schools have on the housing market.
In the past decade, real estate appraiser Stacy Anfindsen says Wake County's property tax rates HAVEN'T had a major impact on home sales or overall property values. At the same time, he can't fathom doubling the rate over the next ten years.
"I'd be stunned if that happened."
For most out-of-state homebuyers, property tax rates are a Wake County selling point. The county has the 35th lowest property tax rate of North Carolina's 100 counties.
"(Prospective buyers) mention one of the things that's so amazing to them is (Wake County's) property taxes being so low," said real estate agent Kelly Cobb.
Experts say, however, that tax rates are only a piece of the property value puzzle. Ultimately, they say, the county must find a financial balance to draw newcomers and provide everyone schools and services.
"I think there's an expectation that's in order to have great schools and attract people and industry, we're going to have to have some increases," Cobb said.