By Susan Dickson
Staff Writer
The Board of County Commissioners presented land transfer and sales tax options to the Chapel Hill-Carrboro and Orange County boards of education at a joint work session on Tuesday.
The board earlier this month voted to put a tax referendum on the ballot next May. Commissioners decided not to put a referendum on the ballot in November, expressing concern that there was insufficient time to educate the public.
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.
If either measure passed, the county could begin collecting funds during the 2008-09 fiscal year. County Manager Laura Blackmon said the funds could help “reduce or slow down the increase of the ad valorem taxes,†but would not serve “as a replacement for that.â€
School officials hope the funds could help during tight budget years. Chapel Hill-Carrboro has several new schools on the horizon, and strained budgets are anticipated.
Most of the commissioners have indicated support for the land transfer tax over the sales tax. Several school board members said they also preferred the land transfer tax.
Chapel Hill-Carrboro school board Vice Chair Pam Hemminger said shoppers might choose to spend their money in other counties if Orange County has a higher sales tax.
Jean Hamilton, Chapel Hill-Carrboro school board member, questioned whether both tax options should be put on the ballot.
“It seems to me in this environment of uncertainty, it would make sense to put both on the ballot,†she said.
“If it doesn’t pass, all of the needs for it are not going to go away,†board Chair Moses Carey said.
“We’re going to have to build schools. We’re going to have to build those parks at some point.
“All we will have to rely on is ad valorem tax until we get one of these passed.â€
Chapel Hill-Carrboro school board member Annetta Streater emphasized the importance of educating the public about the taxes and how the funds could be used.
“In the past, there were a lot of people who didn’t make the decision because they didn’t know enough about the issues,†she said.
Ted Triebel, vice chair of the Orange County school board, said he would like to know how the funds would be spent before he campaigned for the referendum.
“It’s very amorphous right now as to where these funds will be going,†he said. “I’m not willing to go out and expend energy and speak personally if I don’t have an idea of where we come down … and where these funds are going to be.
“We’ve got to make it clear, and I’m not hearing clarity right now.â€
Carey said the commissioners had not yet had time to discuss where the funds would be dedicated, but that they would likely make a decision soon.
The Board of County Commissioners must make a decision by February on which tax option, or both, to put on the May 6 ballot.