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Commissioners to hold sales tax hearing

Posted on June 26, 2008June 28, 2008 by Staff

by Susan Dickson
Staff Writer

The Orange County Board of Commissioners on Tuesday set a public hearing regarding a possible referendum for a quarter-cent sales tax increase for Aug. 19.

Voters defeated a 0.4 percent land transfer tax referendum by about 2 to 1 in May. In last 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 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.

According to county budget director Donna Coffey, the sales tax increase would yield just over $3 million annually.
Commissioners had said they preferred the land transfer tax to the sales tax because of the regressive nature of a sales tax. However, realtor associations came out against the land transfer tax, and it’s been defeated in every county in which it’s been on the ballot.

The commissioners said they hoped a sales tax referendum would have a better chance on the ballot because a sales tax is less confusing than a land transfer tax. In addition, the county might be able to specify on the ballot that funding from the tax would go toward a specific entity, such as schools, pending decisions in the Legislature.

Commissioner Alice Gordon pointed out that the Special Transit Advisory Commission is considering a referendum for the November 2009 ballot for a half-cent sales tax increase to fund transportation, and that the board should consider putting the county referendum on a ballot prior to that.

“If we want to try and have another revenue source that is more independent … it seems like either November or May are our only windows,” Board Chair Barry Jacobs said.

Commissioner Mike Nelson stressed the importance of an adequate education process prior to the vote on the referendum.

“Because we sort of got started late last time and we didn’t necessarily talk everything through, I just want to make sure whatever education process is clearly delineated,” he said.

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