News: CJ Exclusives

County Sales Tax Would Pay For Rockingham Sports Complex

Only referendum on November ballot intended for recreation

Residents in Richmond County are divided on whether to pass a Nov. 4 ballot referendum raising the county’s sales tax rate by 0.25 cents to build a multi-use recreation complex for the city of Rockingham on 118 acres.

Increasing the tax from 6.75 percent to 7 percent is expected to raise between $600,000 and $700,000 annually to apply toward the initial phase of the sportsplex, which is expected to cost between $10 million and $12 million. No cost has been given for the other six phases.

City and county officials see the tax-funded sportsplex as an economic development project that would boost the county’s quality of life. Hosting large-scale athletic tournaments also is expected to capture new sales tax revenues from tourists.

“Having the entire county fund a project that is spearheaded by the city is not a good use of the sales tax revenue,” said Sarah Curry, director of fiscal policy studies at the John Locke Foundation.

“If the city needs more funding for economic development, there are multiple other sources of revenue for such projects, including occupancy taxes, special service districts, state and/or federal grants, revolving loans, etc.,” Curry said.

County governments have an obligation to taxpayers to supply necessary government functions to their citizens, including schools, roads, jails, courts, police and fire, and social service programs, Curry said.

“An expansion of a parks and recreation department through a new multipurpose park does not seem to be a basic function of local government,” Curry said.

Counties have had the option of raising their sales tax by a quarter cent for educational purposes or economic development since 2007. Since then, voters rejected them in 66 counties and approved them in 27.

In November, voters in six counties will decide by referendum whether to raise their sales tax rates. Bladen, Guilford, Mecklenburg, and Rockingham counties would use proceeds for educational purposes. Carteret County would devote its extra tax to dredging. Richmond is the only county seeking a recreational use.

Though no public opinion polls have been taken to gauge voters’ leanings on the Richmond County tax, longtime journalist Kevin Spradlin said the local interest should “help increase what has been historically low voter turnout for Richmond County,” Spradlin said.

“Richmond County residents are devoted and dedicated sports fans, and they vote,” said Spradlin, who owns the Rockingham-based online publication Pee Dee Post. “People who don’t support it are just as passionate.”

Based on feedback in the comment section of his Web-based stories about the proposed park and on the Pee Dee Post Facebook page, Spradlin said sales tax opponents either don’t want taxes raised for any reason, or don’t want to pay a county tax to fund a project in a city where they don’t live or vote.

“We have all heard this ‘spin’ before … the millions of economic impact of NASCAR,” one of his readers wrote. “It’s all speculation without real figures to back it up.”

“What about other spending needs the county has, such as its own infrastructure, sewer and/or water projects, education, etc.,” another reader posted.

County Manager Rick Sago said the proposed sales tax is not targeted for education because Richmond County Schools officials have not approached the county “in any way, shape, or form.”

But Superintendent Cindy Goodman said she was not involved in the sales tax debate because she began her current job in August, and she may seek some of the revenue.

“Our funding has been flat for the last few years. … I’m hoping that maybe we can get a bump this year depending on how this sales tax thing goes,” Goodman said. “We don’t want to be overly demanding” given the county’s financial picture, she said, “and yet it is our job to look after our children and try to provide the best education possible.”

The wording of the referendum “doesn’t preclude it from ever being used for education,” Sago said.

Just because the referendum cites the Rockingham facility as an intended use of the tax hike proceeds “doesn’t mean somebody else can’t come to us in the future,” Sago said.

The recreation complex would feature baseball, softball, football, and soccer fields, tennis courts, a disc golf course, a splash park, a carousel, a miniature train, and a dog park. It jumped to the front of the funding list because $1 million already has been spent preparing it, Sago said.

The county commissioners won’t decide whether to fund all or part of the sports complex until a referendum passes, Sago said. It’s still not clear whether the city or county would assume the construction loan.

“Unless we get the sufficient commitment from the county to handle the debt service, we won’t build the facility,” said Rockingham City Manager Monty Crump. He said the city received a $750,000 grant from the Cole Foundation to buy the land and has spent $889,000 prepping the site.

Sago and Crump defend using sales tax money for a recreation complex because the city and county have met the most pressing infrastructure needs under traditional economic development models.

The jurisdictions have completed school building renovations, water treatment facilities, highway development, upgrades to the Rockingham police station and city hall, and regional sewer plant, they said. Work with Duke Energy on a wastewater project and cooperation with state officials on Interstate 73 are continuing, they added.

Rockingham receives half of a 6 percent occupancy tax the county imposes on hotel and motel visits, a little more than $230,000 annually, but that money is earmarked for a tourist signage program and other uses, Crump said.

Crump and Sago say the interest in a large-scale recreation facility to serve Rockingham’s parks and recreation participant base, which is 60 percent county residents, has been raised by citizens and in local plans.

They say the complex would attract tourists to large events such as Dixie Youth and Pony League baseball tournaments, leagues with which the city has a lengthy history. Visitors will spend money at hotels, restaurants, shops, gas stations, and other venues. It also would enhance the quality of life for local residents, and potentially attract new businesses and other amenities.

But Jesse Hathaway, research fellow at the free-market Heartland Institute, said using sales tax revenue to build giant sports complexes is a poor policy decision. Abundant academic studies have concluded “almost universally this does not pay off in the way that supporters say it would.”

As an example, he said, studies have shown that Super Bowls generally have not generated promised tax returns on investments to lure them to a city.

“Obviously, the Super Bowl is at a higher level, orders of magnitude larger, but … if you don’t see the effects on the scale of a Super Bowl why would you expect to see these effects at a more micro-scale?” Hathaway said.

If elected officials were tasked with putting their own money behind such projects, “I would venture to say they would not invest in such a facility,” Hathaway said. “But since it’s tax money, it’s a big sloshing pool of funds, sometimes elected officials become a little careless with the investments they make.”

Dan Way is an associate editor of Carolina Journal.