by Julie Tisdale
City & County Policy Analyst
On Tuesday, Jackson County voters will be presented with a question about increasing the local sales tax from the current rate of 6.75% to 7%. This would move the county from a sales tax that’s the same as most of its neighbors and 65 of the state’s 100 counties to a rate that’s higher. The exact wording will be something like this:
[ ] FOR [ ] AGAINST
Local sales and use tax at the rate of one-quarter percent (0.25%) in addition to all other State and local sales and use taxes.
The county says it needs the money for schools, which is a good way to promote a referendum. Who doesn’t want to support the children? And they’re estimating that an increased tax would raise a little over $1 million. And $1 million dollars for schools sounds like a good thing.
But that’s $1 million that’s coming out of the pockets of taxpayers. It’s an extra tax every time a mom buys school supplies for her kids, or a dad picks up the new cleats his child needs for soccer. It’s an additional tax every time someone gets his oil changed or buys a new piece of furniture she needs for her home. It’s a tax on pots and pans, computers and televisions, concert and movie tickets. It’s a tax on everything, making living and doing business in Jackson County just that bit more expensive for everyone.
Jackson County can do this because, in 2007, the General Assembly passed legislation that allows counties to put just such referenda to voters and, if they pass, raise sales taxes accordingly. Over the last decade, there have been 111 such referenda covering 67 counties – 2/3 of all the counties in North Carolina. Jackson will be referendum number 112 and county 68.
These referenda don’t have a great track record of success. Only 29 have actually been successful. Not to be deterred by the will of the voters though, 31 counties have repeated the referendum after losing the first time. 14 of those counties have eventually gotten the result they wanted and increased the sales tax on their residents. The persistence award goes to Harnett County who put the tax increase on the ballot in 2007, 2009, 2010, 2012, and 2013 before they finally got the voters to approve it on the fifth try. Eight other counties have put referendums to their voters three or four times.
Jackson County voters should be wary of this. Money for schools pulls at the heart strings, and it plays on the fact that everyone wants what’s good for kids. Voters care about education, and rightly so. But might it make sense to look for cost savings in the county budget first? Might it be better to leave that money in the hands of individuals to spend supporting local businesses, rather than increasing the cost of everything those businesses sell? Might it make sense to keep a lower tax rate that’s in line with most of the state and neighboring counties, rather than making everything just that little bit more expensive than it is on the other side of the county line? Voters beware.