News: CJ Exclusives

County Commission Association Tells Officials How to Sell Tax Hikes

Local governments have a winning record in 2010 referendums

In a panel discussion at the Aug. 27 regional meeting of the North Carolina Association of County Commissioners, government officials offered county commissioners tips on how best to promote the quarter-cent sales tax increase that will soon appear on their ballots. Opponents of the tax increases were not given equal time.

Even in a struggling economy, local tax measures in the Tar Heel State have fared well. Of the nine counties that have held tax elections so far this year, only two have failed. At least nine more counties have a quarter-cent sales tax referendum on the Nov. 2 ballot.

In a phone interview, Todd McGee, communications director of the county commissioners’ group, said the purpose of the discussion was to educate commissioners about the potential of using a sales tax increase as an additional source of revenue.

The sales tax is one of two local-option taxes that dozens of counties have put on the ballot over the past three years. The other is a 0.4 percent land-transfer tax, which has failed every time it’s been up for a vote. The 2007 General Assembly gave counties the right to put local-option taxes on the ballot.

“It’s the commissioners’ responsibility to educate residents why [the sales tax increase] is necessary — just like you would with a school bond or any other referendum,” said McGee.

But there was no opportunity for opponents of the sales tax measures to make their case. “The problem is the presumption that there should be a tax increase,” said Mike Munger, a political science professor at Duke University. “Commissioners serve the public,” Munger said. “It’s up to the voters to decide if a tax increase is needed.”

McGee believes the NCACC is simply doing its job — helping commissioners educate elected officials and other residents of the benefits the new tax revenue would provide.

The quarter-cent sales tax increase would not apply to essential items such as food, gasoline, and medicine.

Not “just … another tax”

The NCACC panel was composed of county representatives who were successful in passing recent sales tax referendums — Pitt County Manager Scott Elliot, Lee County Commissioner Amy Dalrymple, and New Hanover County Commissioner Jonathan Barfield. McGee moderated.

Dalrymple highlighted her opposition to creating taxes arbitrarily. “I am just like everyone else — I get tax bills at our house and I don’t like them to be any higher than necessary,” she said.

Lee County didn’t go into this “just to create another tax,” she said, but “counties have needs.” Dalrymple said the sales tax increase was the best way to raise the needed revenue.

The key to a successful referendum is to tie the sales tax increase to a specific purpose, said Elliot, and then “promote, promote, promote.”

The wording of the measures caused another concern for panelists and attendees alike. The General Assembly sets the ballot language for county sales tax referendums, and the panel considered the permissible language unclear and even confusing. For one thing, counties are not allowed to specify on the ballot which programs they would fund with the new tax revenues.

Commissioners could show “a sign of [their] commitment” by passing a separate resolution stating what programs they planned to underwrite with the new revenue. In Pitt and Lee counties, the issue was education. New Hanover County focused on keeping parks, libraries, and gardens operating fully.

“Let [the purpose] become a community issue,” Dalrymple said.

Opponents of tax increases often will note that these resolutions are non-binding, and cannot force a future board to abide by a resolution passed by its predecessors, McGee said. “They’re right,” he added, but a resolution at least shows the intention to link additional tax dollars to local priorities.

Due to strict regulations on language, the panel encouraged attendees to familiarize voters with the ballot wording so they are not surprised or confused when they enter the voting booth. While panelists hoped for more flexibility, they said they were grateful that the General Assembly had given counties the leeway to put measures on the ballot.

Sales tax increases facing opposition

All the panelists said their proposed tax increases faced formal opposition. In Pitt County, Elliot said it was little more than “maybe one Realtor with a letter to the editor.” A PowerPoint handout Elliot provided also listed a report from the John Locke Foundation, publisher of Carolina Journal, arguing against the sales tax increase.

Dalrymple and Barfield both highlighted more organized opposition, led by Americans for Prosperity. The Lee County chapter was called “very, very” active, vocal, and sizable. In New Hanover, AFP plastered signs all around the county.

Barfield also noted that a former commission candidate had been a formidable voice against the tax increase.

An unidentified man from Watauga County told the panel that “Tea Party people” had protested against the sales tax increase that was on the ballot Aug. 31, and that he worried that the Tea Party opposition would result in defeat of the referendum. Voters rejected it by a 62-38 percent margin.

Amanda Vuke is an editorial intern at Carolina Journal. Associate Editor David N. Bass contributed research to this report.