County officials are encouraging residents to support a quarter penny sales tax increase at the polls this Nov. 6.
During it last meeting, the Scotland County Board of Commissioners agreed to put a referendum on the ballot — likely this November — asking voters whether they would support increasing the sales tax.
The total sales tax is currently 6.75 percent, with two percent designated for county use. It has been estimated by the state that the extra quarter cent tax would raise $600,000.
“The extra tax would help us become more fiscally sound,” said Board Chairman Bob Davis, who said that the additional revenue could be used as a boon to the county’s skimpy fund balance.
“It could help us get to a point where we are not between a rock and a hard place all the time,” Davis said.
Davis called the sales tax “the fairest way the county has of increasing revenue.”
“Everyone pays, not just those who own property and not just those who live in Scotland County.”
Commissioner John Cooley also praised the equitable nature of the tax as well as what it could mean to the county’s fund balance.
“We don’t have much of a margin right now, and we are just skimming along with not enough in savings and the fund balance,” Cooley said. “This could help us with that.”
Davis said that there was “no indication” that the extra revenue would be used to decrease the property tax, which is currently at $1.03 for the 2012-13 fiscal year. One cent on the property tax raises approximately $180,000 for the county.
“ … while I would certainly like to see us use a sales tax to reduce the property tax, it is mighty easy for government to keep on spending, so I would not say that we would use this to reduce property tax,” Cooley said.
The county’s fund balance currently sits at approximately $7.4 million, $1.4 million of which is unrestricted. The county has been admonished by the NC Local Government Commission to increase that unrestricted total to at least the minimum level required by statute (8 percent of the total budget of about $40 million).
The county has added approximately $200,000 to the fund balance for this year.
The estimate that the extra tax would raise about $600,000 came from the state Department of Revenue and the NC Association of County Commissioners.
According to County Manager Kevin Patterson, that estimate is reasonable.
“We probably would not budget the full amount just to be conservative, however,” Patterson said.
That a quarter penny sales tax addition could raise that much took several commissioners by surprise.
“We were all pleasantly we surprised when we saw that number,” Commissioner Carol McCall said.
Initial estimates gave a range anywhere from $200,000 to the $600,000 figure eventually given by the state.
The board does have the option to hold the referendum on a date of their choosing, but because of the extra cost and likely poor turnout, the referendum will almost certainly be on the ballot Nov. 6.
“We want as many people as possible to be involved in making this determination,” said McCall.
McCall said that having a separate vote on another day was never seriously considered.
Early feedback from locals on the tax has been overwhelmingly positive, said Davis.
“I’ve only had one person say that they would not support any addition tax, and numerous others saying that they would support this idea.”
Residents can expect to receive an informational flier in the mail sometime before November.
“It will be in a question and answer format, and will address what the tax would apply to among other things,” Davis said.
The tax would not apply to most non-prepared food items, prescription drugs, gasoline, vehicle purchases or utilities payments.
If the referendum item is approved, the board would still be required to enact the tax if it is to take effect at the earliest possible date, April 1 of 2013.
“And we would go through this much work for nothing,” Davis said. “If the people vote for it, it is probably a done deal.”