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BIG CITY: Not sold on sales tax

Kirk Ross
I’m not sold. Not yet.

Orange County government is sitting on the verge of actually accomplishing something it hasn’t been able to do easily in years – raise additional revenue.

With a quarter-cent sales tax referendum sitting on the ballot in what is primarily a municipal election cycle, the odds aren’t bad that voters in the towns along with those of us unincorporated types in the southern part of the school district will sign off on raising sales taxes.

The odds are a lot better than last time around when the referendum lost by a squeaker. But right now, as things stand, I’m voting it down.

(Boo-Hiss)

Pardon me for being a villain, but I think there are better ways to fund the things on the laundry lists for school construction and economic development than adding a generic, across-the-board tax on the good people of Orange County.

I don’t fault the people trying desperately to guarantee a new revenue stream for things the state has cut, and I certainly don’t think raising money to spur job growth is bad, but there are sound, reasonable ways to get at both that don’t involve another – albeit small – regressive tax hike.

While you’re busy un-friending me on Facebook, let me tick off a few concerns:

The addiction to sales taxes

North Carolina has been sales-tax happy for more than a decade now, using them for school construction, hurricane relief and, well, you name it. A small family like mine isn’t hurt much by them, but larger families and really anyone who buys retail, including small businesses stocking up at Costco, get hit.

Who gets the economic-development money?

The pitch is that half of the money raised will go to economic development (or for you people in Carrboro, economic sustainability), mostly in the form of infrastructure. The county would really like to get a full array of utilities to its economic-development districts along the interstates and U.S. 70, and thus be able to better recruit new industries. But which industries? How much do they pay? What other incentives are going to be offered, and who’s making the calls?

I’m troubled by an infusion of tax dollars into an economic-development effort that doesn’t seem to have found its footing yet. There’s been a change in leadership and direction, and while a lot of good thought has gone into how to do economic development right, in the recent past, consecutive big deals, from a giant retail development at Buckhorn Road, to a new UNC airport to the ever-illusive big-box store, were sold as the future.

Recruiting is a murky business and we have not been all that good at it. My sense is Orange County is never going to compete in a straight-up incentives game as long as Alamance, Durham and Chatham are our neighbors. What sells Orange County are our schools and our quality of life.

So why not just support the tax hike for the portion that goes to schools?

The short answer is that we have bonds for that. They work really, really well. We’ve passed school-construction and -repair bonds in this county without batting an eye. It is how we’ve funded many fine schools. You probably drive by one every day.

Bonds also have the added benefit of fitting the money to the task – you only sell as much as you need to at any one time. Also, have you looked at interest rates lately?

I’m not happy about what the General Assembly did to education this year, but we can pay for things we need here in Orange County without relying on a regressive tax strategy.

I think a lot of people assume like me that the quarter-cent sales tax hike is in lieu of a property-tax increase or in lieu of floating a bond, which likely would mean a property-tax increase down the road.

I would vote for a bond in a heartbeat and take the hit in my annual tax bill simply because it seems a little more fair and a little more transparent.

A quarter-cent hike won’t mean a lot to my family. But I’m not sold that it’s a necessity to do what we need to do as a county and a community. If you supporters can convince me otherwise, you got another vote. You may not need it, but it couldn’t hurt.

3 Responses

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  1. Kimberly Willardson

    Thank you, Mr. Ross, for your concise insight into why passage of the sales tax referendum is not a good idea at this time. I’m also voting it down. Yes: we have bonds to support our schools. And, yes: “What sells Orange County are our schools and our quality of life.” But without a sound, sustainable, and steady-state economic development plan in place, that quality of life can quickly disappear in a downward spiral of orange cones, traffic jams, and empty retail/residential space. We need a much more detailed economic plan before we throw money at it.

  2. bob lucas

    Another property-tax increase???

    Orange County & Chapel Hill/Carrboro’s current high Property-tax rates are resulting in residential rental rates that exclude all but the well heeled.
    Alas, the diversity we all strive for in community will be diminished.

  3. Desiree Goldman

    Kirk,

    I am glad you don’t mind an increase in your property tax. Unfortunately, as a realtor I see people who have to decide to move out of Chapel Hill/ Carrboro because their property taxes are too high. Another group can’t even move here.

    An 84% ratio of dependency on property taxes in NOT sustainable for any county. At some point we need to make a shift. 25 cents on $100 does not seem to be onerous when it does not apply to gas, groceries or medicine. It allows us to generate money on all the tourism in our county.

    I respectfully disagree with you.