Governmental Affairs

Water and sewer are deliberately left off this cost list, and correctly so — that system is wholly ratepayer-supported through system development fees and monthly utility charges, not general tax dollars (see Point 4).

$340,174 coming in vs. $285,370 going out is a surplus, not a loss — and this is not our math. It is the county’s own detailed 100-home example on slide 14 (“Example Analysis: 100 Home Development…”). The problem is that the study does not lead with that slide.

It leads with a “High Level” summary on slide 10, whose figures do not line up with slide 14 or with the rest of the model. Three things are wrong with that headline slide:

• Slide 10 counts only part of the revenue. It credits the development with $268,000 in property tax and stops there — even though slide 14 shows the same 100 homes generating another $52,905 in sales tax and $19,269 in vehicle tax. The county’s own detail slide lists $340,174 in total revenue; the county’s own headline drops $72,174 of it.
• Slide 10 and slide 14 report two different costs, and neither is reconciled. Slide 10 asserts $383,240 in expenditures; slide 14 itemizes the cost of the very same development at $285,370 — a 34% difference the study never explains. And slide 10’s larger figure is not an itemized cost at all: it is simply the $268,000 in property tax multiplied by the disputed $1.43 residential ratio. The headline “cost” is the conclusion assumed in advance, not a build-up of actual service costs.
• Even the itemized costs are only partly supported. Three of slide 14’s four cost lines trace back to per-household assumptions on slide 13 — schools ($2,665 per pupil × 0.492 children per household), human services ($518.75 per household), and general administration ($553.42 per household). Public safety ($46,911) does not; it appears on slide 14 with no perhousehold basis shown anywhere in the deck. And slide 13 states its per-household figures as givens, without showing how they were derived from the county’s actual budget.

Set the county’s own complete revenue ($340,174, slide 14) against the county’s own itemized cost ($285,370, slide 14), and a 100-home development comes out ahead — a surplus of roughly $55,000 a year, not the shortfall the “High Level” slide claims.

2. The study gives businesses credit for money that residents spend

About one out of every five dollars in the county’s entire budget — roughly $74.6 million that the study lists as “Other Taxes” — is credited 100% to businesses and 0% to residents.

For a North Carolina county, that “Other Taxes” line is most likely local-option sales tax: the tax collected on purchases countywide, and a separate, much larger line than the study’s small “Sales & Services” item (about $1.2 million). What the “Other Taxes” line actually includes needs to be documented in the report before anyone can judge whether 100% of it truly belongs to businesses.

But if it is in fact local-option sales tax, it should not be attributed to commercial at all — it is money residents spend at the register.

To be clear, sales tax is paid by the shopper, not the store. When a family buys groceries, gas, or furniture, they pay the tax. The study appears to give the store all the credit for money that came out of the homeowner’s pocket — like saying the restaurant, not the customer, paid for dinner.

This single allocation choice drives the entire conclusion. Credit the sales tax to the residents who actually spend it, and the residential number improves dramatically — moving it close to breakeven.

3. Schools are charged to homes at full cost — including costs those homes don’t create

Schools are the largest single cost blamed on housing. Two problems inflate that number.

First, not every child is a traditional public school child. The study counts 45,422 “school-age children” from the Census. But that count includes children in charter, private, and home schools. Johnston County’s actual public-school enrollment is meaningfully lower. Counting kids who don’t attend county schools overstates the school cost that new homes create. (The exact public enrollment figure should be pulled from Johnston County Schools to put a precise number on this.)

Second, charter schools don’t cost what traditional schools cost. Charter schools do receive a share of per-pupil operating dollars — but the county does not buy them land, construct their buildings, or pay their power, water, and maintenance. Those big-ticket capital costs only apply to traditional public schools. So a home whose children attend a charter, private, or home school costs the county far less than the study’s flat average assumes.

4. New housing pre-pays and pre-builds its own water and sewer capacity

The materials point to water and sewer demand from new homes as if it were a cost the county absorbs. It is the opposite.

Before a new home is occupied, the developer pays system development fees — charges specifically designed to fund the new capacity and treatment that growth requires. On top of that, the developer builds the water and sewer lines and pump stations and hands them over to the utility for free.

Under North Carolina’s Public Water and Sewer System Development Fee Act (G.S. Chapter 162A, Article 8), those system development fees are calculated to recover the cost of the capacity a new connection will use — in plain terms, growth pays for growth. The system is budgeted separately from the general tax fund and funded wholly by its ratepayers, so none of it draws on the property and sales taxes this study is about.

So new residential development largely pays for its own utility growth up front and then donates the pipes in the ground. Water and sewer are also a self-supporting utility funded by customer rates, not by the general tax fund. Presenting it as a subsidy to housing gets the direction exactly backward — housing is subsidizing the utility system’s expansion.

5. The study measures yesterday’s average, then uses it to judge tomorrow’s homes

A Cost of Services Study is a snapshot — it divides last year’s budget across land types. It was never designed to predict the cost of the next house, and the American Farmland Trust, whose method the study uses, cautions against using it that way.

Most county costs are fixed in the short term: buildings already built, debt already owed, offices already staffed. A new home does not add a courthouse or a new administration building. Spreading the average cost of everything the county already owns onto each new home overstates what that home actually costs to serve.

Conclusion

Businesses need workers, workers need homes, and the shops that generate the county’s sales tax only exist because residents are here to shop in them.

The rooftops come first — and the revenue they create should be credited to them. This is the point the study misses most completely. The main reason Johnston County has commercial revenue is that people live here. Stores, restaurants, and service businesses locate where their customers are; the sales tax they collect is money residents earned and spent; and the workers those businesses depend on have to live somewhere. Commercial tax base is not an alternative to rooftops — it is a product of them. A county cannot limit housing and expect to “balance” its way to more retail revenue, because housing is what creates the demand the retail lives on.

When these corrections are made — crediting sales tax to the residents who pay it, counting only the children the county actually pays to educate, recognizing that developers pre-pay and pre-build water and sewer capacity, and measuring the real added cost of a new home rather than a countywide average — residential development at least breaks even, and by the county’s own detailed 100-home example (slide 14) it comes out ahead at about $1.19 collected for every $1.00 spent.

New housing in Johnston County pays for itself.

We respectfully ask that any policy or land-use decision drawing on this study account for these corrections before treating residential growth as a fiscal burden.