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County details plans for potential sales-tax funds

Posted on June 23, 2011 by Staff

By Joshua Lucas
Staff Writer

Voters deciding whether to support a sales-tax increase on November’s ballot got a bit clearer input from county leaders on Tuesday as to how they plan to spend the money.

The ballot referendum asks voters to approve increasing the county’s sales-tax rate by a quarter cent on each dollar of sales. With the state sales and use tax rate set to decline to 4.75 percent on July 1, the total sales-tax rate county residents would pay if voters pass the measure would be 7 percent.

Although county commissioners had already indicated their desire to split the money equally between education and economic development, the resolution they unanimously approved on Tuesday gives a bit more specificity, especially about the economic development aspects of their plans.

“People want to know what we’re going to do with the money, and to the extent possible, that we’re going to spend the money the way we say we’re going to spend it,” board Vice Chair Steve Yuhasz said.

Under the resolution, 60 percent of the economic-development money would go toward financing debt for capital improvements to infrastructure. Another 20 percent would be spent on new business recruitment. Ten percent would be earmarked for small business loans to help existing businesses expand, and the final 10 percent of the economic-development money would be available for the commissioners to create initiatives on a case-by-case basis.

The board also approved a more detailed chart of suggested priorities for the use of the money, such as agricultural development and the creation of a nonprofit entity to promote economic growth.

Not all board members were entirely comfortable with such specific recommendations, however.

“We can’t possibly anticipate, to this level of specificity, what future boards may want to do,” Commissioner Barry Jacobs said. He noted that a 10-year economic development plan adopted a decade ago would not have taken into account the Sept. 11 attacks or the current recession.

Commissioners made a point of stressing that the education portion of the sales-tax money would not be used to pay for things that are currently funded in the county’s annual budget.

In other business:

• the county gave final approval to its annual budget, which keeps taxes and spending essentially flat for a third straight year;

• commissioners delayed the final purchase of land in Carrboro for a southwest branch of the county library, pending the resolution of legal issues; and

• the board approved a temporary funding agreement with Chapel Hill that gives the county and town until the start of 2012 to come to terms on the share of funding the county will ultimately contribute to the Chapel Hill Public Library.

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