by Sam Hieb
By a 4-1 margin, the Alamance County Board of Commissioners voted to put a quarter-cent sales tax hike on the March 2020 ballot.
The rationale for putting the sales tax hike on the March primary ballot, as opposed to the November general election ballot, is to give commissioners the opportunity to cut property taxes in half for the 2020-21 fiscal year. In June, according to the Burlington Times-News, commissioners voted 3–2 to increase the property tax rate by 8 cents to help cover the cost of $189 million in education bonds voters approved last November. Yet voters rejected a quarter-cent sales tax hike on the same ballot.
Some choice–approve a sales tax hike or have property taxes raised. However, Alamance County is unique– argued Commissioner Steve Carter— considering it is home to the shopping venues Alamance Crossing and Tanger Outlets. Thus a large percentage of the sales tax revenue will come from outsiders. That’s a tough argument to make, however.
Either way—sales tax hike or property tax hike–the debt needs to be repaid, said County Manager Bryan Hagood:
Hagood recommended the commissioners not cut property taxes by more than 2.5 percent, saying sales-tax revenues are not reliable and tend to come down when the economy is tight and consumers aren’t spending as much. Carter said that small a cut might not be enough to get voters to approve a sales-tax increase.
With a 4-cent property tax rate reduction, Hagood recommended the commissioners put all the additional sales-tax revenue into the debt service plan for those bonds, basically treating it like one of the other sales taxes the county collects that are restricted to being spent on education. That would not keep county commissioners in the future from using the sales tax any way they chose, but either way, the bonds have to be paid.
“This is debt, not a program that can be cut,” Hagood said. “Other spending could be cut, but not debt.”
That’s an idea–cut spending.