Business owners will meet with city officials Friday to learn more about a 1 cent sales tax increase for which the city wants legislators to approve a referendum.
Roanoke Valley Chamber of Commerce President Allen Purser said the meeting will be at 10 a.m. in the first floor conference room of city hall.
Purser said business owners want to learn more about what the city is proposing.
Al Eatman of Lloyd’s Decorating is one of the business owners who will be attending the meeting.
Eatman said business owners are concerned about having a potential 9 cent sales tax should the county decide to implement a quarter cent sales tax voters approved earlier this month and should the city get approval for a 1 cent sales tax increase.
While Eatman said he understands the city has to pay the theater debt, which the 1 cent sales tax would be used for, he and other business owners wonder why it has to be 1 cent. “The city’s in a bind they have to get out of.”
He said a half cent sales tax would give the city an estimated $850,000 to $1.1 million a year, “Which would almost take care of the debt.”
Eatman is seeing gradual signs of the economy improving. The year before last he sold no paint for new houses, last year he sold paint for at least two new homes and this year he has sold paint for three new homes.
A 1 cent sales tax increase in this environment, Eatman said, would mean the city would have an overage of the $1.7 million to $2.1 million the city believes this tax would raise.
The highest sales tax in the state is Charlotte at 8.25 cents. “For us to be .7 cents higher than anywhere else is a hard pill to swallow,” he said.
Eatman said the business owners not only want to learn from the forum but want to offer the city alternatives if they exist.
The city announced Tuesday a public hearing on the 1 cent local sales tax will be held at its March 8 meeting at 7 p.m. at the Lloyd Andrews City Meeting Hall on Jackson Street.
According to the public notice, city council is seeking comments on its proposal to request the state legislature to allow the city to hold a referendum on the tax to pay theater debt obligations.
The tax would only be charged within the city limits.
Mayor Emery Doughtie could not immediately be reached for comment this morning.
The city is considering a 1 cent sales tax to pay close to $23.4 million in theater debt and council last week approved a draft letter requesting authorization from state legislators to hold a referendum on the matter.
“The bill, as envisioned by the city, would allow the residents of Roanoke Rapids to vote on a referendum allowing for a 1 cent local sales tax to be charged within our city limits only and to benefit the city alone in order to pay its debt obligations relating to the Roanoke Rapids Theatre,” the draft says.
The letter says while the debt of the theater is $21.5 million, the balance, if paid off early or refinanced is closer to $23.4 million. “The city’s present annual debt for the theater is over $1.7 million or 11.33 percent of our budget. The city wishes to control this debt in a manner that does not place a heavy burden on our local property taxpayers. We believe a sales tax of 1 cent, using the standard exemption to sales tax recognized by state law, is the best way to repay this debt.”
The difference between this request and others, the letter says, is the city is requesting a sales tax for just the incorporated limits of its jurisdiction, not the unincorporated areas of Halifax County. “Although we will need to work together to resolve some collection issues and reimbursement issues with both the county and the state of North Carolina, we are confident with your help that this can be accomplished.
“Also, this is merely a request for authorization to hold a referendum on the question of the local sales tax and, if passed, permission to enact it by the city council. This is not an outright request to apply the tax without first going to our residents for a vote of approval. We believe this is the way to govern ourselves and give us a path to take care of our own debt without asking the state for direct or indirect assistance with repayment.”
The letter notes the city estimates an annual sales tax just in the city limits will produce an annual revenue of $1.7 million to $2.1 million. With the exception of possible administrative fees, the amount projected is close to the annual debt of the theater. “Our request would be to use these proceeds only for theater debt, apply it only until the theater debt is paid in full and then the local sales tax should expire.”
