RALEIGH — Sharp divisions among Person County commissioners should raise red flags for voters considering a proposed $675,000 sales-tax hike. Three of the five commissioners have questioned the timing and potential negative impact of a tax increase, according to a new John Locke Foundation Regional Brief.
Voters will decide Nov. 2 whether county commissioners can raise the local sales tax rate 0.25 cents. Person County has rejected the idea once before, with 77 percent of voters saying “no” to a higher sales tax in November 2008.
As voters cast ballots this time, JLF experts urge them to consider commissioners’ public concerns about the tax hike, along with vague promises to use the extra money for “quality-of-life” expenses.
“Person County commissioners want voters to approve a $675,000 sales-tax increase — the equivalent of a 1.8-cent property tax hike — at a time of high unemployment,” said Dr. Michael Sanera, JLF Director of Research and Local Government Studies. “And the commissioners are not at all united in pursuing this course.”
Commissioners voted 3-2 in July to place the tax hike on the November ballot. “Voters might want to consider the objections raised among county commissioners as they haggled over this issue,” Sanera said.
Sanera examines the commissioners’ debates and promises with the help of report co-authors Joseph Coletti, JLF Director of Health and Fiscal Policy Studies, and Dr. Terry Stoops, Director of Education Studies.
“According to meeting minutes, Commissioner Sam Kennington cited the negative impact a sales-tax increase would have on Person County’s small businesses,” Sanera said. “He also argued that with nearly 14 percent of Person County families below the poverty level and the unemployment rate at 10.5 percent, the timing was not right to add more tax burden on the citizens.”
Commissioner Kyle Puryear joined Kennington in voting against the sales-tax referendum, citing the negative impact on local merchants, Sanera said. “And the two commissioners casting ‘no’ votes were not alone in raising concerns,” he said. “Commissioner Jimmy Clayton agreed that the timing of the tax increase was not good due to the weak economy. He was willing to send the measure to a vote of the people, but that’s not much of an endorsement.”
Voters also have good reason to question whether Person County needs additional revenue, Sanera said. “In order to build support for the tax increase, the commissioners adopted a resolution stating that the new tax would ‘fund quality-of-life expenses,'” he said. “There’s no definition of ‘quality of life.’ It’s so nebulous that it could include almost anything.”
Person County voters approved in 2008 a $6 million bond package for a recreation and senior center that has not yet been built. The county manager has said Person would need a 2-cent property tax increase to pay for this center, Sanera said. “It’s not clear that the ‘quality-of-life expenses’ mentioned in the commissioners’ tax-hike resolution represent any commitment to fund the recreation and senior center.”
County Manager Heidi York has noted correctly that the resolution does not restrict future commissioners in any way, Sanera said. “She should have added that this resolution does not even bind the current board to stick with its promise,” he said. “The current board, by law, can spend the funds from the tax increase for any legal purpose.”
Puryear cast the lone vote against the resolution. “He argued that the sales-tax hike was a burden on taxpayers, and he expressed his ‘preference to lowering the tax rate to rejuvenate the economy and the citizens of Person County,'” Sanera said.
Since the General Assembly decided in 2007 to give each North Carolina county the chance to seek voter approval for higher sales or land-transfer taxes, voters have rejected the taxes 68 times in 85 tries.
“Citizens at all levels — federal, state, and local — are frustrated with excessive and wasteful government spending,” Sanera said. “They believe they are not getting value for their tax dollars. County spending is no different. Person County voters have a chance to send commissioners a clear message Nov. 2.”
Michael Sanera, Terry Stoops, and Joseph Coletti’s Regional Brief “Tax Hike in Person Would Be Bad for Small Business: Three of Five Commissioners Agree” is available at the JLF Web site. For more information, please contact Sanera at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].