Expected Water and Sewer Rate Hikes and Property Tax Increases Could Devastate Already Struggling Taxpayers
RALEIGH – State Treasurer Dale R. Folwell, CPA, has asked the Cooper Administration to pay $304,735.73 representing the estimated water and sewer payments that would have been made to Tyrrell County and the Town of Columbia from the State of North Carolina for the first five months of this year. In September of 2019, the Department of Public Safety (DPS) closed the prison in Tyrrell County, citing staffing shortages of corrections officers and prison personnel.
The closing has had severe economic consequences for Tyrrell County and the Town of Columbia because the prison is the largest customer of the water and sewer system, representing approximately 30% of the system’s total output.
“I’m very concerned that the closing of the prison in Tyrrell County could lead it to default on bonds that were issued to build the system including a reverse osmosis water treatment plant,” said Treasurer Folwell. “The state should hold harmless local governments like Tyrrell County and the Town of Columbia.”
When the prison opened in 1998, bonds were issued to build sewer lines in support of the new facility. With the decrease in revenue, both the Town of Columbia and Tyrrell County are in jeopardy of defaulting on their loans.
Default could lead the Local Government Commission (LGC) to take over the management of the county and town. The LGC was created in 1931 to address issues in local government finance that arose during the Great Depression. Since its inception, the LGC has provided consistent financial oversight for more than 1,300 units of government.
“It is hard to overstate the damage that the state’s actions have done to this community,” said Treasurer Folwell. “Tyrrell’s entire population is the size of a high school in Charlotte. So often it is the state’s lower- and fixed-income citizens that bear the burdens of decisions coming out of Raleigh. The first rule of government should be to ‘do no harm’”
The Treasurer added that he has been in close contact with Sen. Bob Steinberg, Rep. Edward C. Goodwin , local leaders, North Carolina Association of County Commissioners and the North Carolina League of Municipalities on the issue and appreciates their support on solving the financial crisis that the prison closing has caused.
The Department of State Treasurer’s State and Local Government Finance Division handles the sale and delivery of all state and local debt and monitors the repayment of state and local government debt.
