Sales tax increase proposed for school construction

Vance County Schools’ latest hope for financing school construction is not a bond referendum but an increase in the local sales tax.

The idea, proposed by Board of Education Chairman Tommy Riddle and explained last week by Schools Superintendent Norm Shearin, is for the Vance County Board of Commissioners to add a penny to the sales tax after getting authorization from the General Assembly.

Such a move would raise the sales tax within the county to 8 percent.

The proposal is far from reality but represents a creative approach to a desperate problem: Overcrowding in the middle schools is stifling the system’s best efforts to upgrade education in Vance, but the highly taxed county has no easy way to pay for a third middle school.

That new middle school accounts for about $12 million of the school system’s standing proposal for a $28.1 million capital improvement plan through a bond referendum. That proposal, approved by the school board in December, is the latest of a half-dozen facility plans in the past four years; none of them has advanced as far as an up-or-down vote by the commissioners.

The new middle school has been part of every proposal, and Shearin said in an interview Wednesday that it is the one indispensable element.

“The middle school, right now, is having the most detrimental effect on our system,” he said. “We just have too many kids, and the middle schools are too small, and they’re middle school kids. They’re hormone-crazy. … They have more energy than they know what to do with, and they have all the answers.”

That’s a sentiment several members of the Vance County Coalition Against Violence, including Team Vance leader Marolyn Rasheed and Board of Education member Margaret Ellis, echoed when the question of school facilities arose at a meeting this month.

Henderson-Vance County Chamber of Commerce President Bill Edwards also said in an interview Thursday that action on the middle schools is crucial.

Eaton-Johnson Middle School and Henderson Middle School serve a total of 2,200 students, Shearin said, but neither was meant to hold more than 800. Rising rolls of special education students and a push to reduce class sizes have put extra pressure on the buildings’ capacity.

“I don’t know when things will just come apart,” Shearin said. “I do know that we’re doing the best we can. It is taxing on our teachers and our administrators.”

Riddle raised the possibility of a higher sales tax at a meeting March 21 with Shearin, schools Finance Director Rudi Ligon and their county counterparts, including County Manager Jerry Ayscue. Ayscue could not be reached for comment.

It was the first of a series of meetings to explore financing options for school facilities before bringing a proposal before the two boards. Shearin said the goal of those meetings is to identify a funding source and to create a timeline for addressing the $28.1 million proposal, which he said contains the school system’s “real, bare-minimum needs.”

“I don’t think we need to drag out the process because we don’t have any answers,” Shearin said. “If you can’t do it today, how about tomorrow?”

The superintendent recognizes that Vance County’s tax rate of 90 cents per $100 of property value is among the highest in the state, and he doesn’t want to drive that rate higher. And he knows the commissioners don’t want a higher rate.

“I don’t think a county commissioner here would support a triple-digit rate,” Shearin said.

The possibility of such a rate has stalled the bond proposal. Ellis told the Vance Coalition Against Violence that the commissioners are operating under the assumption that a $28.1 million school construction bond would add 15 or 16 cents to the property tax rate.

Shearin said that if a bond referendum proves to be the only option for financing school facilities, the proposal that goes before voters will have to be much smaller than $28.1 million. Even a bond issue that did nothing but build a middle school would cost almost half the full proposal.

“If we don’t have some alternative measures, the county commissioners will insist on using the bond process rather than increasing the tax rate themselves,” Shearin said.

Ellis speculated that the commissioners might allow a vote on a bond referendum without endorsing it, thus dooming the measure at the polls.

It’s always possible the state could come to the rescue. School systems are lobbying the legislature to present a statewide school construction bond to voters to deal with $6 billion in facility needs. And the General Assembly could pass a lottery. But neither proposal is likely to survive.

Shearin said the school system is exploring grants to reduce the money Vance taxpayers would have to produce, but he said no grant is going to build an entire school. As he sees it, no other option is as strong as a sales tax increase earmarked for school facilities.

“I really believe that a 1-cent sales tax, if approved, would not hurt people and would over a period of time provide the money we need,” Shearin said.

A sales tax increase would tap into a vibrant part of the Vance County economy. Figures from the Vance Economic Development Commission show that retail sales topped $522 million in the fiscal year that ended June 30, 2004, an increase of nearly 2 percent from the year before. And those figures don’t reflect the thriving new restaurants at Dabney Exchange.

In contrast, the shutdown of textile and tobacco factories has devastated the property tax base, meaning that each cent on the tax rate produces less money now than it did in 2001.

Shearin said a penny increase in the sales tax would yield $3 million a year. In four years, that money could build a middle school. In three more years, it could build an elementary school to replace Clark Street Elementary.

The tax would be a reliable, growing source of money for school facilities and would meet the school system’s future needs for renovations and repairs, Shearin said. “It will put us off getting in this situation again. … It would be just absolutely fantastic.”

A sales tax increase is fairer than a higher property tax because it spreads the burden more broadly, Shearin said. Plus, because Vance is a retail center for neighboring counties on both sides of the state line, Vance residents wouldn’t have to bear that burden alone.

“I would think the business community would look more favorably on a modest sales tax increase for education than they would on a property tax increase,” Edwards said.

“I think the community could and would support that in lieu of an ad valorem (property) tax increase.”

Any effort to pass a local sales tax increase would need the General Assembly’s authorization, and it’s too late in the legislative session to push such a measure through this year. And because the local boards haven’t discussed, let alone approved, the idea, Shearin has not approached the three legislators representing Vance County about such a bill.

For now, Shearin is trying to prevent the issue of school facilities from being shoved onto the back burner, as has happened so many times this decade. “We need to talk about possible solutions, and then we need to start something. We can’t wait another 10 years.”