Halifax County citizens today approved a quarter cent sales tax in a referendum which saw less than 7 percent of its registered voters go to the polls.
There were 2,367 votes cast with 1,551 voting for the sales tax and 812 voting against it. According to unofficial results, 6.77 percent of the voters went to the polls.
“I’m very pleased the voters agreed with the county commissioners,” Commissioner Rives Manning said tonight. “It’s the best way to raise additional funding if and when it’s needed. It’s spreading the tax burden around and they agreed it was the fairest way to raise funding.”
While the matter may be discussed at Monday’s board meeting, any decision on implementing the tax won’t be made until the county is deeper in budget negotiations, Manning said.
County Manager Tony Brown said there will be no immediate recommendation to implement the levy. “That will be part of our budget discussion. My goal was to have it passed but not to have it implemented. Just because it passes doesn’t mean we will implement it. We can use it this year, next year, in five years or never.”
Brown said he was surprised by the margin, 65.64 percent of the voters voting for it and 34.36 percent voting against it.
The history of the sales tax in North Carolina began in 2007 when the General Assembly agreed to cover the full cost of Medicaid and started paying the county share.
To cover this expense, legislators traded one-half cents that used to go to local governments.
The assembly also allowed counties the option of enacting a quarter cent sales tax to recoup some of the revenue lost in the tradeoff, a document prepared by the county says.
The county is holding this referendum because it has seen large decreases in its property and sales tax streams and tremendous demands for the work it does for the citizens, according to the document. “Though there have been areas where workload has lessened — permits and inspections — most areas have remained steady and many have increased,” the document says, including the Department of Social Services and the Health Department.
This is because of, according to the fact sheet, increased unemployment and expanded eligibility. “These services are mandated and adequate staffing levels are required to be able to provide those services.”
The document says it is not wise to use cash reserves to cover operational expenses. “This has been done by Halifax County over the last two years and the board of commissioners wants to have other options in lieu of fund balance.
“With the ongoing budget crisis, the board needed to expand revenue sources and, in September, moved to have the sales tax referendum put to the voters.”
If passed by the voters, the board of commissioners would then have the option of implementing a local one quarter cent sales tax.
“Sales taxes,” the document says, “spread the burden of revenues to a larger audience. The majority of Halifax County revenues are derived from property taxes, which means a larger burden is placed on property owners.
“Sales taxes provide opportunities for non-property owners, including those who do not live in the area, to contribute to the needs of county citizens.”
The sales tax will not apply to the following:
Groceries or non-prepared foods
Buying vehicles
Buying gasoline
Buying prescription drugs
The quarter cent sales tax will, with the current economy, provide about $1 million in revenues. “The only other revenue source the county has at its disposal is property taxes,” the document says. “To raise $1 million in revenues via property taxes with the current tax rate, it would require at least a 3 cent increase in the tax rate — 68 cents to 71 cents.”
For every $4 someone would spend they would pay an extra penny
If a person spent $10,000 per year they would spend an extra $25 per year
If a person owns a $100,000 home and the tax rate was increased to 71 cents, they would spend an extra $30 per year
