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Quarter-cent sales-tax funds put to use

Posted on August 16, 2012 by Staff

By Rose Laudicina
Staff Writer

Less than a year after the quarter-cent sales tax was approved, Orange County’s Economic Development Office is already putting to use some of the money the tax has generated.

Orange County voters approved the quarter-cent sales tax last November, putting an additional tax on items Orange County residents and visitors purchase, with the exception of groceries, prescription medicine, gasoline, certain agricultural supplies and motor vehicles.

From the money collected – the county estimates the tax will generate around $2.5 million annually – 50 percent is allocated to economic development while the other 50 percent is divided, based on the average daily enrollment, between the county’s two school systems.

Almost $230,000 has already been generated from the new tax, which went into effect on April 1. However, according to Steve Brantley, Orange County’s economic-development director, his department didn’t start receiving money until July.

Thus far, the economic-development office has spent $20,000 of the $228,952.89 the county has received on a deal involving the state, Mebane and Orange County that encouraged German aluminum heat-exchanger manufacturer AKG to expand its production plant in Mebane instead of building a new plant in another state.

According to Brantley, as part of the deal the county will pay $20,000 for five years to help match a state grant for AKG’s $3 million expansion project, which will create an estimated 90 new jobs.

David Hunt, Orange County information specialist, said he is happy to see money generated from the sales tax already going to work.

In addition to the AKG expansion, the economic-development office has identified other economic ventures to fund using monies collected from the sales tax.

Orange County Gymnastics, formally located in Chapel Hill, was given a small-business loan using funds generated from the quarter-cent sales tax to help the business establish a permanent location at 505 Meadowlands Drive in Hillsborough.

The gymnastics studio had been forced to move twice in the span of a few months before settling into their new Hillsborough location.

“The owners of Orange County Gymnastics had some unfortunate things occur” while trying to find a permanent location, Brantley said. “Our office made a small-business loan to the firm, with money earmarked from the quarter-cent sales tax.”

Money from the sales-tax fund has also been allocated to help the Town of Carrboro extend a sewer line along Roberson Street for the use of businesses on the south side of the block of Main Street from Armadillo Grill to the Friendly Barber.

Carrboro estimated the sewer project to cost $233,600 and received a $171,700 grant to construct the sewer line. The remaining funds needed for construction will be covered by funds from the town and Orange County.

Brantley said that he estimates the county will provide $33,000 to $35,000 to Carrboro for the sewer fix, and those funds will come from the quarter-cent sales tax.

“It is imperative that it [the sewer] be replaced as soon as possible,” Brantley said. “We are happy to use the sales tax to help Carrboro.”

Hunt said so far the county seems on track to collect the amount it anticipated receiving from the sales tax – about $2.5 million annually.

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