Orange County is one of the richest counties in North Carolina in terms of per capita income, but we perennially rank near the bottom when it comes to retail sales and sales tax revenue.
But there are some indications that this may be starting to change: “Our taxable sales are now $1.47 billion,” said Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce, during his annual “State of the Community” report Thursday at the Friday Center.
According to numbers from the state Department of Revenue, taxable sales in Orange County topped a billion dollars for the first time in fiscal year 2011 and have risen steadily since – topping $1.4 billion in fiscal year 2014 and reaching nearly $1.5 billion in the last fiscal year. That led to a spike in sales tax revenue – breaking $70 million in the last fiscal year for the first time ever, up from just over $50 million three years ago.
That’s a big shift. In 2012, despite being no. 2 in the state in per capita income, Orange County ranked 81st in per capita sales tax revenue. But in 2013, just a year later, Orange County ranked 42nd – moving past Wake, Alamance, and Chatham in the process.
“So around our office there were double-high fives, there was chest bumping – it was really exciting,” Nelson said.
But he says that number is a bit deceiving – because it’s not all about greater retail sales. “The revenue went up because we added a half-cent tax and a quarter-cent tax,” he said – and those tax increases added to the spike, along with the actual increase in sales. (Together, Orange County collected about $9.2 million from the half-cent and quarter-cent taxes in fiscal year 2015 – accounting for a little less than half of the $20 million increase in revenue from fiscal year 2012.)
Still, Nelson says the change is a promising sign that Orange County is making progress on an issue that’s troubled local policymakers and business leaders for many years – even if the issue still remains.
We’ll have many more numbers from Nelson’s State of the Community address on WCHL and Chapelboro.com in the coming days.http://chapelboro.com/featured/sales-tax-revenue-up-in-oc-but-why/
Nelson and Chamber board chair Paige Zinn at Tuesday’s presentation. Photo by Donn Young, courtesy Orange County Visitors Bureau.
CHAPEL HILL – Town and county officials have talked for years about making Orange County a place where people can “live, work and play” all in one location—but despite the effort, recent data show we’re still more of a bedroom community than county planners would like.
“Every morning 43,000 people wake up outside of Orange County and drive in, and every morning 39,000 wake up in Orange County and drive out–and only 21,000 people wake up and work in Orange County,” says Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce.
In all, about two-thirds of those who work in Orange County live outside the county lines—and about two-thirds of Orange County residents leave the county to work. Those percentages have been steadily increasing for at least a decade—and Nelson says it’s putting a strain on the roads.
“The transportation planners should be really concerned,” says Nelson. “The challenge is (that) we have one of the best transit systems in the nation, but these people live outside that transit service area. They’re (using) park-and-ride lots, they’re driving in from all sorts of other places.”
The trend even extends to municipal employees: as of 2010, only 22 percent of those who work for the Town of Chapel Hill actually live in the Town of Chapel Hill. (That’s down from 41 percent in 1995.)
The most obvious would-be explanation for all the migration is simple economics: the cost of living in Orange County is high, so presumably people with low-paying jobs in Orange County have to live elsewhere, while residents of the county commute to higher-paying jobs in other parts of the Triangle. Nelson says that’s what he thought too—but the numbers actually say otherwise.
“Now, I had believed–and had even used the rhetorical ‘hey, it’s BMW out and Oldsmobile in’–that we had been importing our unskilled and semi-skilled labor and we were sending out our white-collar workers in order to work in the (Research Triangle) Park,” he says. “(But) that is not what is happening.”
In fact—contrary to popular belief—the number of individuals commuting into town for jobs paying more than $40,000 is nearly identical to the number of individuals commuting out of town for jobs paying more than $40,000. And the same is also true for jobs paying between $15,000 and $40,000, as well as jobs paying less than $15,000.
“So the disconnect between worker and work opportunity is not about wage,” Nelson concludes. “Some of it’s just about work opportunity. Adding work opportunity in any of these ranges will lower the commute.”
Interestingly, despite the increase in the percentage of people who drive into and out of Orange County for work, the average commute time has remained fairly steady for the last five years: Orange County residents in 2011 spent an average of 21.9 minutes to get to work—up only slightly from 21.4 minutes in 2007. (The average American’s commute is 25.4 minutes.)
Nelson delivered these numbers on Tuesday at the Friday Center, as part of his annual State of the Community report. You can see the whole presentation at this link.http://chapelboro.com/news/business/transit-planners-should-be-concerned-about-long-commutes/
Aaron Nelson and Chamber board chair Paige Zinn at the State of the Community meeting. Photo by Donn Young, courtesy Orange County Visitors Bureau.
CHAPEL HILL – Orange County is the wealthiest county in the state of North Carolina—but the steady flow of money outside county lines continues to be a cause for concern.
“Per capita income is the highest (and) unemployment is the lowest in the state, but we still have this huge retail gap,” said Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce, presenting data Tuesday at his annual State of the Community report.
The “retail gap” refers to the difference between the amount of money spent by Orange County residents each year and the amount of money that’s actually spent in Orange County.
According to the state Department of Commerce, Orange County residents spent about $1.68 billion dollars last year alone—but retail sales in Orange County were less than $1 billion.
“The gap in Orange County is $728 million” in 2012, says Nelson. “Making gains on this will have (a) huge impact.”
That $728 million gap is nearly twice that of Durham County ($376 million) and more than three times the retail gap of Chatham County ($236 million). And Alamance County—thanks in part to Tanger Outlets—actually has a $154 million retail surplus. Nelson says that gap helps explain why Orange County—number one in the state in per capita income—ranks only 65th in terms of sales tax revenue.
And he says eliminating that gap—or at least reducing it—will go a long way toward easing the tax burden on local property owners. About 87 percent of Orange County’s taxable land is residential property (compared to just 60 percent in Durham), which means the county’s property tax burden will always fall most heavily on homeowners. Nelson says that number’s not going to change—so the key is to generate more sales tax revenue from the commercial property we have, so as to be less reliant on property taxes as a whole.
“We should stop focusing on (and) beating ourselves about that split between residential and commercial,” he says. “We need to use that to remind ourselves (that) we’ve got to grow revenue from commercial sources.”
And Nelson also says Orange County can ease its burden by taking steps to reduce “wealth migration,” the amount of income that leaves the county whenever people move. Not surprisingly, Orange County draws in wealth from all over the country—but when it comes to our neighboring counties, there’s a lot more money leaving Orange County than coming in.
“The biggest outflow is $179 million worth of wealth…moving to Chatham County,” says Nelson. “The second highest amount was to Alamance County, $86 million, (and) Durham County, $83 million…Wealth migration has had a negative impact on Orange County, but a positive impact on our neighbors.”
Those numbers cover the period from 1992-2010; in that span, Orange County suffered a net wealth-migration loss of nearly $50 million in gross income. (All of that loss came in the last nine years; until 2001 Orange County was gaining more than it was losing.)
Nelson delivered his State of the Community report on Tuesday at the Friday Center. You can see the full presentation at this link.http://chapelboro.com/news/business/chamber-orange-county-tax-base-falling-into-retail-gap/
Aaron Nelson and Chamber board chair Paige Zinn. Photo by Donn Young, courtesy of the Orange County Visitors Bureau.
CHAPEL HILL – Year after year, Orange County consistently ranks as the wealthiest in the state of North Carolina—but poverty, even here, continues to be a nagging and serious issue.
“There’s a big disparity between wealth, (and) there continues to be growth in childhood poverty,” said Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson at his annual State of the Community presentation this week. “That is (a statistic) that we need to pay close attention to.”
Orange County ranks first in the state with a per capita income of $48,683 in 2011, well above the state average of $36,000. But in spite of that, our poverty rate is also well above the state average: in 2011, 16.9 percent of Orange County residents were living below the poverty line, compared to 16.1 percent of all North Carolinians (and 14.3 percent of all Americans). The percentage is even higher in Chapel Hill alone, where 22.1 percent of residents lived below the poverty line in 2011.
“Some folks have often discounted that–(because they think) that’s just the student population…but our poverty level is high,” Nelson says. “We ought not to discount it simply because it includes students.”
For the first time, researchers this year were able to distinguish between students and non-students when analyzing wealth and poverty in the area. Students do account for much of the poverty rate in Chapel Hill—but that poverty rate is still elevated even when they’re taken out of the equation. About ten percent of Chapel Hill’s non-student population lives below the poverty line—a poverty rate that’s less than the state average, but still more than twice as high as nearby communities like Apex and Cary.
And the poverty rate increases when the focus is narrowed to children. “That is on the rise,” says Nelson, “and in a pretty serious way.”
The key increase is in the percentage of “economically disadvantaged” children, which is to say children who qualify for free and reduced lunch. 26.5 percent of Chapel Hill-Carrboro City School students and 41.6 percent of Orange County School students qualified for free and reduced lunch in 2011-12—the highest percentage in both districts since at least 2006, when the Chamber began collecting data.
And the high level of need in Orange County is at odds with the common perception of Chapel Hill as a wealthy community—a disconnect that actually makes it harder for governmental and non-governmental organizations to address the real need that exists.
“(It’s called) ‘Chapel Hill Syndrome,'” Nelson says. “Donors get this: it’s a belief that we don’t need anything, Orange County doesn’t need anything–we have the highest per capita income, the University’s there, the hospital’s there, your economy’s bulletproof–but the reality is that some of us feel that way and forget to reinvest and take a look under the rocks on what’s going on in our community with respect to poverty, particularly children in poverty.”
Nelson delivered his State of the Community report on Tuesday at the Friday Center. You can see the full presentation at this link.http://chapelboro.com/news/business/orange-county-wealthy-on-average-but-poverty-still-lingers/
Aaron Nelson and Chamber board chair Paige Zinn compare notes before the State of the Community presentation. (Photo by Donn Young, courtesy of the Orange County Visitors Bureau.)
As the country, the state and the region pull slowly out of recession, the state of our community is strong — but still could stand to get stronger, particularly when it comes to housing.
That was the takeaway from the Chapel Hill-Carrboro Chamber of Commerce’s sixth annual State of the Community report, delivered at the Friday Center on Tuesday by Chamber president Aaron Nelson.
“(We have a) strong, educated workforce (that’s) increasingly diverse,” he says. “Our economy and community are resilent — we were late into this recession and we were first out — and many of those indicators look good.”
Generally speaking, Orange County ranks among the best in the state in most indicators of social wellbeing, from educational achievement to the crime rate to public health. Fittingly, though — for a region so often concerned about its perceived status as a ‘bedroom community’ — many of the more worrying statistics relate to movement.
“We are growing, and we will still grow…(and) we’ve got to figure out where these folks are going to live,” Nelson says. Orange County’s population in 2012 was just shy of 138,000, up 22,000 from the turn of the century — and by 2025 Orange County is projected to add another 30,000 residents, for a total of more than 166,000.
“That’s a lot of folks,” Nelson says. “Let me give you some perspective: 140 West Franklin downtown, the big tall thing, that holds 300 people. I just said 30,000.”
And the local housing market is struggling to keep up — a fact that’s contributing to the already-high cost of renting and buying homes.
More than half of all housing units in Chapel Hill are occupied by renters — in Carrboro it’s more than 60 percent — and affordable housing remains persistently scarce. More than half of all renters in Orange County now pay more than 35 percent of their income in rent, well above the “affordability” threshold.
“The rental market is growing, but the lack of supply is driving (the) rate,” Nelson says. “This huge increase in those rates — folks are moving into our community and (adding) pressure.”
And the cost of homeownership remains elevated as well. Nelson says the average closing price for an Orange County home has dropped slightly from its peak in 2010 — it’s now about $319,000, down from $330,000 — but that’s still far pricier than an average home in our neighboring counties, and it’s not just because the houses are bigger.
“The price per square foot in our market is dramatically higher,” Nelson says. “(It’s) $134 a square foot (in Orange County)…in Chapel Hill city limits it’s $180 a square foot. That’s — my editorial comment — a supply challenge, because folks are able to build it in Durham for $93 a square foot.”
Compounding the housing crunch, of course, is the demand coming from UNC: of the 29,000-plus students at UNC-Chapel Hill, 63 percent live off campus—more than 18,000 in total, all seeking housing in and around Orange County. That’s already caused some controversy in the Northside and Pine Knolls neighborhoods, both very near campus—where Town officials have had to step in to address parking concerns, and longtime residents have been driven out by the rising cost of housing (and the resulting property tax hike) that came with the increased demand.
But Nelson says it could be worse: in fact, 55 percent of UNC’s undergrads live on campus, a far higher percentage than many of UNC’s peer institutions. (At Indiana University, for instance—in the Chapel Hill-esque town of Bloomington—only 40 percent of undergrads live on campus.)
And there are also several housing projects currently in the works near downtown that are specifically geared for students—a development that Nelson says will also go a long way toward alleviating the problem of affordable workforce housing as well.
“(In) my view, the greatest growth of workforce housing, workforce rental, has been new student rental,” Nelson says. “If you go back in time (and) take a look at all the apartments that were student apartments in the late 1990s, early 2000s — when new student housing got built, students moved to that, and what was backfilled into the old student housing was workforce housing.”
Still, with 30,000 more residents projected to move into Orange County in the next twelve years, the housing crunch is not likely to go away anytime soon—and Nelson says that’ll be the case across the entire Triangle, where half a million more residents are expected to flock in by 2025.
We’ll have more from the Chamber’s State of the Community report throughout the week, but you can see the entire presentation for yourself at this link.http://chapelboro.com/news/development/in-orange-county-housing-crunch-is-here-to-stay/