03/15/07 — Commissioners talk about taxes

View Archive

Commissioners talk about taxes

By Andrew Bell
Published in News on March 15, 2007 2:01 PM

The Wayne County Board of Commissioners, in search of sources of money to pay for looming construction needs, approved a resolution in support of a local option one-cent sales tax during a work session Wednesday.

The resolution asks legislators to allow Wayne to add the tax to help them with school building and/or pay the county's annual Medicaid bill.

The county already has four other local-option taxes in place, including a one-cent tax and three half-cent taxes, Finance Director Pam Holt said. All have been authorized by the state legislature to give the county a way to come up with more revenue.

An additional one-cent sales tax would provide the county with about $7 million a year for as long as the sales tax is in place. County officials said a statewide bond referendum that is being considered in Raleigh would provide the county with a one-time payment of about $35 million.

Commissioner Efton Sager, who is a member of a statewide steering committee studying possible ways for counties to raise more money, said state officials believe they can gain public support for at least a $1 billion statewide bond referendum for school construction costs. If approved, it would be the first statewide bond referendum put before the voters in more than 10 years.

Although most of the commissioners said they are not opposed to a state bond referendum, Sager said he was hesitant to support it because state officials could change the formula concerning how much each county would receive.

With a local sales tax, the county would not be limiting itself financially, County Manager Lee Smith said. Also, a sales tax allows more residents to contribute, in contrast to a property tax increase that would affect only affect a portion of local residents. During the commissioners' retreat on Jan. 26, consultants told board members that they would need to raise the property tax rate by at least 5.5 cents to cover the expected expenses the county faces this year, including school construction.

One possible revenue source that has been discussed over the past year by county officials is a local bond referendum. Commissioners and school board members have both said a referendum, if approved by voters, could help pay for the school board's proposed $90 million capital plan. The commissioners did not broach the subject of a local bond referendum at all during Wednesday's meeting.

Instead, the commissioners discussed other possible revenue options. The commissioners said they have to not only consider the school's building plan, which state education officials estimate could actually be more than twice that much, given the steady increase in construction costs. In addition to the school needs, commissioners are eyeing about $115 million in other projects, such as a new animal shelter and expansion of the jail and Department of Social Services, among other projects.

County officials had expected proceeds from the new state lottery to help with school construction costs, but state officials are now projecting only $140 million to divvy out among the state's 100 counties this year.

Sager said Wayne's portion would not be nearly enough to cover the increasing costs of school construction. According to the state Department of Public Instruction, the statewide average to construct a new school last year was more than $146 per square foot, which is about $50 more per square foot than in 2003.

The commissioners also approved a resolution to make more money available to the school board. About two years ago, legislators removed public schools' sales tax exempt status, Smith said. If local legislators can lobby for schools to be sales tax exempt through House Bill 67, Wayne County schools would have an additional $250,000 to $300,000 per year.

Although it might not seem like much, the commissioners agreed that every little bit counts.

"We need to take strong action on this thing. We can't just stop with support of a resolution," Commissioner Atlas Price said.