County sales tax back on the table

Orange County officials are considering re-introducing a sales tax increase previously rejected by voters to help alleviate the economic impact of state budget cuts.

At Monday’s meeting, Orange County Commissioners discussed re-introducing a quarter-cent sales tax referendum in the next election.

Commissioner Barry Jacobs said the revenue from the sales tax would likely go toward education and fostering economic development, which were slated to receive 42.5 percent of the tax revenue in November’s original ballot item.

The sales tax increase, which was estimated to bring about $2.3 million annually to the county, failed by just more than 1,000 votes.

Jacobs said the state budget includes about $3 million in cuts for the county, but the impact would be hard to determine at this point.

“(The quarter-cent sales tax is) an alternative to higher property taxes,” Jacobs said. “We could absorb a large hit from the legislature.”

Commissioner Chairwoman Bernadette Pelissier said proposals in the state legislature that would take money away from education.

Gov. Bev Perdue’s state budget proposal lowers county school construction lottery funds from 40 percent to 10 percent of net revenues and shifts other education-related expenses to counties.

Clarence Grier, the county’s financial services director, said Orange County will experience a loss in revenue without the sales tax increase, becoming even more reliant on property taxes for income.

Grier said the county needs a way to offset this financial impact.

“The tax would be used to supplement that loss,” he said.

Jacobs said the last year’s political climate wasn’t good for proposing a tax, and the referendum could have been better explained.

Last year’s ballot only said what the tax increase was, not what its revenue would have been used for.

She said the sales tax could work this year because the county has more time to educate the public.

Last year, the time between the board voting to put the tax on the referendum ballot and the public weighing in on the increase in elections was only about 90 days, Pelissier said.

“There wasn’t enough time to get the word out,” she said.

Commissioners will solicit public opinion on the tax increase and the uses for its revenue before any further action is taken, Pelissier said.

“It’s very important to let them know what commitment they have made, and what it will be spent on,” she said.

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