01/16/08 — Sales tax hike will be on May ballot

View Archive

Sales tax hike will be on May ballot

By Matthew Whittle
Published in News on January 16, 2008 1:46 PM

Faced with a myriad of county projects looming on the horizon, and with the state General Assembly allowing it the opportunity as part of last year's Medicaid relief package, the Wayne County Board of Commissioners voted unanimously Tuesday to place a quarter-cent sales tax referendum on the May 6 primary ballot.

The commissioners did not, however, take any vote or discuss at length during the meeting how the resulting $2.5 million in annual revenues might be spent.

But, county Manager Lee Smith noted that there are no restrictions on how the sales tax money might be used.

"That was part of the negotiations with the state," he said. "It's really for any use. It could be for general operations. It could be for capital. It could be for schools. It could be for debt payoff."

He explained that the quarter-cent sales tax option was given to the counties as part of Medicaid relief to help them replace the half-cent sales tax the state will be withholding to help pay for the newly added expense of the federal health care program.

This year, the county projected its Medicaid expenses to be about $8.5 million, with about $3.7 million expected in estimated revenue through the half-cent sales tax.

However, as county Finance Director Pam Holt noted, while the county should eventually come out ahead, officials "just don't know how much."

"It's just too speculative. We just don't have any idea," she said. "It's all in the timing."

But, Smith noted, even if approved, the county's quarter-cent sales tax would not be automatically implemented.

"This does not mean you will do it. It just means you have the option," he told the board.

However, even if the tax is approved by residents in May, the earliest retailers can begin collecting it is Oct. 1, and the county won't likely begin seeing any revenues until at least December.

But, while the commissioners made no formal decisions on spending -- deciding instead to wait until after they discuss a timeline for capital projects and county programs at their retreat in February -- individually, they have indicated the revenue would likely be spread around, with schools being a top priority.

"Probably most of it would go to schools," commission Chairman Bud Gray said.

But he and Commissioners Andy Anderson, Efton Sager and J.D. Evans all also noted that because there are no restrictions on the money, it could be used anywhere.

"You've got to look at the whole list," Commissioner Jack Best said. "There are so many needs in this county."

Those include the Wayne County Public Library system, the county Health Department, the county Department of Social Services, the county Services on Aging department and the county jail -- needs the commissioners say have been neglected because of the Medicaid expenses.

"We're going to be open-minded about it," Commissioner John Bell said. "We've got to keep it on the table without any specific designation. We want to keep it open so we can call the shots when necessary."

But, they continued, they realize that to get anything approved by the voting public, they will need to be more specific about their intentions.

"If you don't educate people, a lot of them are going to look at this as just another tax, which it is, but would you rather have a property tax increase or a sales tax," Commissioner Atlas Price said. "The sales tax, everybody pays."