The Vance County Board of Commissioners should seek legislative approval for a local referendum on a sales tax increase to support school construction.
That’s the recommendation from County Manager Jerry Ayscue in his report to the board for Monday night’s monthly meeting of the commissioners.
In discussions between the school system and county administration, Board of Education Chairman Tommy Riddle proposed adding 1 cent to the sales tax, dedicated to the schools’ capital needs. That would make the total sales tax 8 percent in Vance County.
Schools Superintendent Norm Shearin embraced the idea as the best way to finance the construction needs of the school system. The school board sent the commissioners a $28.1 million facility-needs proposal in December; a third middle school, costing about $12 million, and a replacement for Clark Street Elementary, for more than $8 million, make up the bulk of that request.
The additional sales tax would raise an estimated $3 million per year and would allow Vance to tap into its economic strength as a regional retail center. More people than Vance property owners would wind up contributing to the cost of new schools and renovations.
The top financing alternative, and the one the school board requested in December, is a bond referendum backed by property taxes. County commissioners have been told such a bond issue would add 15 to 16 cents to the property tax rate of 90 cents per $100 of valuation.
“I would say that the sales tax is probably less painful and less noticeable,” Ayscue said in an interview last week, because the sales tax is paid a little at a time, while the property tax is paid in a lump sum. “For that reason, the sales tax probably would receive a more favorable reception.”
Henderson-Vance County Chamber of Commerce President Bill Edwards recently said he thought the business community would support a sales tax increase to get a new middle school if it meant that property taxes would not go up.
Of the 7 cents in the current sales tax, 2.5 cents goes to the local government, and the 4.5 cents goes to the state.
Mecklenburg County, home to Charlotte, appears to be the only North Carolina county whose sales tax exceeds 7 percent. That county has an extra half-cent to finance its transit system.
Ayscue said a couple of other counties have received legislative authority for a local sales tax increase but have not enacted the tax.
The General Assembly may allow a county to enact a local-option tax by public referendum or by vote of the commissioners. Ayscue recommends the referendum route.
In his report to the commissioners for Monday’s 6 p.m. meeting, Ayscue asks that the commissioners “take appropriate action to request legislative authority” to hold a referendum authorizing the additional penny on the sales tax.
The commissioners’ Education Committee backs the recommendation, the county manager said.
“To keep all options open,” Ayscue wrote, the legislation should allow the revenue to be used for the capital needs of the school system and of Vance-Granville Community College.
The deadline for filing local legislation has passed in both houses of the legislature. But local lawmakers have filed blank bills for Vance County, and Ayscue said it’s possible that Vance could piggyback on sales tax bills filed for other counties.
“It’s difficult to get authorization from the legislature, but it can be done,” he said. As of early last week, Ayscue had not discussed the prospect with this area’s legislators.