The Clay County Board of Commissioners withdrew a referendum on a land-transfer tax Tuesday after critics pointed out that the county failed to notify voters of the special election soon enough to conform to state law.
The commissioners voted unanimously to remove the tax increase from the ballot. Officials have no plans to reschedule the referendum, County Manager Paul Leek said.
If approved by voters, the land-transfer tax would have imposed a 0.4 percent fee on all real estate transactions in the county. Clay County officials said proceeds from the tax would fund school construction needs, according to the Clay County Progress.
Commissioners had previously scheduled the referendum for June 24, but officials waited until May 15 to publish a one-page notice alerting the public to the upcoming vote, five days after the latest date necessary to meet statutory requirements.
The county’s tardiness in notifying voters of the ballot initiative violated state law, according to Rick Zechini, director of government affairs for the North Carolina Association of Realtors, an organization opposed to the land-transfer tax.
The association was prepared to file a lawsuit if the county did not reschedule the referendum, he said. “We aren’t going to let up. We think that the public needs to know what the commission was trying to do,” he said.
In response to an inquiry from the Clay County attorney asking for an opinion on the situation, State Board of Elections Director Gary Bartlett stopped short of intervening and said taking action to change the date of the ballot referendum was up to county officials.
“It is the Clay County Commissioners that have the authority to rescind their action or to reschedule the election if they believe notice was inadequate,” Bartlett said.
“Any decision to cancel the referendum is up to the county board of commissioners and not within the discretion of either the county board of elections or this office,” he said.
Kathy Hartkopf, legislative liaison for the government watchdog group North Carolina FreedomWorks, questioned why the commissioners chose late June to put the ballot question before voters.
“I find it deeply disturbing that the Clay County commissioners chose to ballot the real estate transfer tax when Clay County voters will be coming to the polls to vote in only one partisan race: the Democratic primary runoff for North Carolina commissioner of labor,” Hartkopf said.
“It seems fair to assume that had Clay County commissioners truly wished their citizens to have a voice about this regressive tax, they would have balloted the initiative in May when voters of all affiliations had races in which to vote,” she said.
The land-transfer tax is one of two local-option taxes that dozens of counties have considered during the last year. The right to put the tax increases on the ballot stems from a budgetary provision approved by the General Assembly last summer that gradually transfers the Medicaid funding burden from the state’s 100 counties to the state government.
Part of the new system allows counties to give voters the chance to approve a quarter-cent sales tax, a 0.4 percent land-transfer tax, or both.
The land-transfer tax has appeared on the ballot in 19 counties since November, and it failed in every county, often by wide margins. The sales tax has fared better, having passed in eight counties.
One week after the May 6 primary, when the land-transfer tax went 0-for-4 on the ballot, State Rep. Pryor Gibson, D-Anson, introduced a bill in the legislature to repeal the statutory provision that gives counties the right to put the land-transfer tax on the ballot. The legislation has not come up for consideration.
In an interview with the Clay County Progress, the Clay County commissioners and county manager said they did not know why the tax had proven so unpopular with voters in other counties.
“We think it will pass in Clay County because our citizens see the need for a new school, have always supported the school system, and value the education of the youth,” they said.
David N. Bass is associate editor of Carolina Journal.