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County Commission defers tax decision

Posted on September 6, 2007 by Staff

By Susan Dickson
Staff Writer

Having allowed the deadline for putting a tax referendum on the November ballot to pass, the Board of County Commissioners must now determine whether to put a land transfer tax, a sales tax increase or both on the ballot next May.

The state Board of Elections required counties to decide by September 6 if they were going to put a tax referendum on the ballot for November’s elections. The Board of County Commissioners took no action regarding the tax option at a work session last week.

In this year’s state budget, the Legislature gave counties the option of a 0.4 percent land transfer tax or a quarter-cent sales tax increase to help compensate for money taken away from counties in a deal to turn responsibility for paying for Medicaid over to the state.

As a result of the budget deal, counties lost state-supplied school construction money this year and will lose some sales tax revenue in coming years. Orange County will lose about $500,000 this year through the changes in funding.

According to county budget director Donna Coffey, the land transfer tax would yield a little more than $4 million in revenue annually, while the sales tax increase would yield just over $3 million.

Most of the commissioners have indicated support for the land transfer tax over the sales tax. Commissioner Barry Jacobs said on Thursday that he would support putting both options on the ballot for consideration.

In addition, Jacobs questioned other board members’ hesitancy to put a referendum on the November ballot.

“I didn’t think there was anything to lose, because you can put [the referendum] on as many times as you want,” he said. “I think we could do it [in November] if we really wanted to do it.”
Jacobs also pointed out that if a tax option passed in November, the county could start collecting money sooner than if it passed in May.

“We need this,” he said. “We need this for a lot of things that we’ve talked about that we want to do in this county, a lot of our priorities.”

Board Chair Moses Carey said he wanted to make sure that the county had enough time to educate the public about the two taxes before putting either on the ballot for consideration.
“I don’t think two months is an adequate time to do that,” he said. “There’s a price to pay for putting it on [the ballot] if it fails.”

Commissioner Valerie Foushee also said she thought the county did not have enough time to run a good education campaign before the November elections.

“Knowing that we will have a counter-campaign at the same time, it’s incumbent upon us to make sure that the public is as educated about this as possible,” she said.

Commissioner Alice Gordon said that she did not have a preference for putting a referendum on either the May or the November ballots. However, she added that she preferred the land transfer tax over the sales tax increase because it would be less regressive.

“I would suggest that we not wait too long,” Gordon said, noting the losses that the county will face from the budget deal.

The tax options were not a decision item on the board’s work session agenda, so the commissioners took no action.

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