Vote on sales tax is Nov. 6
By NICOLE CARTRETTE
Staff Writer
A quarter-cent.
Alone it is just one-fourth of a penny.
As an additional sales tax for goods (not food) purchased in Columbus County, it could amount to close to $1 million in revenue that county commissioners say would not have to take from additional property taxes.
A referendum to be held on Nov. 6 will determine if the board will be allowed to levy the additional sales tax come April 1, 2008, along with other counties across the state pursuing the option.
The Columbus County Board of Commissioners, along with every other county in the state, had the option of pursuing either a land sales transfer tax or sales tax. Columbus chose to pursue the sales tax that is estimated to bring in $934,000.
The one-fourth percent land transfer tax, opposed at the state level by real estate groups, would have generated approximately $443,968 in 2006 and $577,284 in 2007, according to N.C. Association of County Commissioners data.
Some counties are asking voters to vote on both, but only one option may be chosen. After the referendum, it is up to the boards to actually vote in the tax.
County officials say the additional tax is necessary to meet future needs and to build up the county’s low fund balance.
“Our problem is attempting to rebuild the fund balance,” Interim County Manager Leo Hunt said.
In June, as interim finance director, Hunt told the board that the county’s fund balance (savings) had been depleted for years to balance the budget while spending had increased.
Essentially, the county was spending more than it was generating in tax revenue and had covered shortfalls with savings – savings the state recommends stay at or above 8 percent of the county budget.
Columbus County is close to that minimum and earlier this year was advised that for counties close in size to Columbus the average fund balance was 26 percent of the total budget.
Columbus County had just half of that at 13 percent.
“We need to do some maintenance and repair on the courthouse – if not, we are going to have to build one,” Hunt also said.
A representative from the Administrative Office of the Courts told commissioners at a recent meeting that the courthouse is one of the worst he had seen from a health and safety standpoint.
Opponents of the sales tax, such as the Locke Foundation, say it is another unnecessary tax that will only increase government spending.
Columbus County is one of several counties that are predicted to have increased revenues once the Medicaid swap is completely phased in in three years.
While that is true, Hunt said, “once you crunch the numbers of taxes taken, Medicaid increases and the state’s assumption the county will see increased revenues of $700,000 next year and roughly $1.7 million in the third year.”
Essentially, the swap doesn’t amount to the total $6 million the county taxpayers are paying in property taxes that go to Medicaid.
At a public hearing held on the tax, few spoke in opposition. One resident said he would like to see property taxes replaced completely with sales taxes.
Every commissioner spoke in support of the tax and said they saw it as a fair tax.
Come Nov. 6 when all the votes are tallied, it will be known which argument voters bought.