News: CJ Exclusives

Mecklenburg residents will vote on controversial sales tax hike

Twelve years ago, the General Assembly gave counties the option to ask residents if they wanted more government spending.

The county commissioners’ response this year in Mecklenburg? Spend an extra $50 million on the arts and parks.

The General Assembly passed legislation in 2007 allowing every county a quarter-cent sales tax increase, as long as voters approve it in a referendum. If Mecklenburg residents approve the proposed tax in November, the county board will have $50 million to allocate, which, in July, voted to divide in four ways — 45% for the Arts and Science Council, 34% for parks and greenways, 16% for education, and 5% to small town arts and culture projects and parks. 

The proposal passed the commission 7-2, with some praising the tax as a step toward increased “equity” across Mecklenburg County. Others criticize the science council for poor spending and fundraising choices, saying it shouldn’t be the steward of a multimillion-dollar tax.

Beyond sufficient funds

The ASC is asking for far more than it needs, said John Locke Foundation Senior Fellow Joe Coletti. The commission would award it $22.5 million, which is nearly $7 million more than the council’s current budget.

A good portion of the grant would go toward operating expenses for which cultural organizations often don’t receive specified funding things like running box offices, hiring security, maintaining buildings, etc., ASC president Jeep Bryant said. In addition, the ASC would increase the number of localized arts programs and fund cultural field trips and after-school opportunities. 

But Commissioner-at-large Pat Cotham, a Democrat, says in Mecklenburg, the arts are a “want,” not a “need.”

“Affordable housing is a big topic. Transportation is a big topic. Violence is a big topic.  But the arts? Greenways? Those are not big topics, and this is our last opportunity to use this tax,” she said.

Democratic Commissioner Susan Harden disagrees. The city cut a large check to affordable housing last year in the form of a $50 million bond, she said. The county also allocates a half percent of the current 7.25 percent sales tax to public transit. 

“Our cultural sector is worthy of public support,” Harden said.

But even Mecklenburg’s arts organizations say the ASC’s funding “crisis” is imaginary. Blumenthal Performing Arts Center President Tom Gabbard deplored the ASC’s “negative” messaging in an email to county manager Dena Diorio, WFAE reported this summer.

“Tell the ASC to stop talking about the decline of workplace giving immediately,” Gabbard wrote. “They make us sound like entitled trust fund kids, whining about Daddy’s annual allowance going down.”

Poor fundraising choices

ASC has traditionally depended on workplace funding drives. But the model doesn’t work like it used to. Since 2007, ASC’s workplace giving plummeted from $11.5 million to $5 million, and total workplace drives have dropped from 300 to 75, said Krista Terrell, ASC’s vice president of communications and marketing.

Basically, it’s an outdated model.

“They raise money like it’s 1990,” Cotham said. “People give money differently now than they did years ago.”

Many donors now prefer to give directly to the organizations they support the ballet or symphony, for example rather than an intermediary such as the ASC. 

The internet largely inspired this change, Harden said, making it easier to reach out to donors, and also less expensive, i.e., no postage stamps. 

Cotham criticizes the rest of the board for resorting to taxpayer dollars when an organization can’t raise money. The board should instead come up with creative ways to increase interest in its events, she said.

Programs like the Charlotte Ballet, for example, simply aren’t bringing in the numbers they used to. Between 2017 and 2018, ticket sales were down 13%, and contributions were down 15%, per an independent audit proforma. But that didn’t stop expenses from increasing 8% during the same time period, including a 37% increase in management expenses, noted Tariq Bokhari, a Republican on the Charlotte City Council. 

Charitable contributions or models have their place, Bokhari said. And a steady public cash flow wouldn’t incentivize the Arts and Science Council to find an efficient funding source or make programs more attractive to residents.

“That ticket sales number tells me someone’s not in the back room strategizing on program development,” Bokhari said. “It’s enabling us to kick the can down the road so they don’t have to answer tough questions about whether the way they operate their model is meeting the needs of the community.”

Cotham also accuses the ASC of poor advertising, even though she’s donated to ASC over the years.

“I didn’t know they were in a crunch. So if I didn’t know, then they’re not communicating well,” Cotham said. 

The ASC gets $2 million in funding from the county and $4 million from the Charlotte City Council. It has to raise for the rest. Under the new structure, the ASC will no longer have to fundraise, but will simply allocate funding from the sales tax.

Shaky “guarantees”

Regardless of the ASC’s fundraising model, the commissioners have no obligation to actually allocate the money it promises to the arts and parks, notes Chris McCoy, N.C. State Director of Americans for Prosperity, who is partnering with the Mecklenburg Tax Alliance to oppose the bond measure.

Despite the July vote, the county could simply use it for something else. The shift might not come immediately, but perhaps years down the road, when new commissioners take over, McCoy said.

It’s happened before, Coletti noted. In 2011, Buncombe County residents voted to increase taxes for new and renovated buildings at Asheville-Buncombe Technical Community College. Instead, commissioners have transferred $15 million from the sales tax to the general fund ever since 2013. 

Harden says she’s confident commissioners will keep their promises. She touts a resolution commissioners adopted Oct. 1, saying it “sets in stone” the earlier vote as much as possible, and that it would take five votes to overturn.

But the resolution hardly cements the July decision, Coletti says. Voters would only approve the tax itself, not the specific tax allocations.

“They’re selling it today for the arts and parks,” McCoy said. “But in the long term, what does that really mean?”



  • Douglas Singleton

    It is important to understand that generally accepted accounting principles require contributed services to be recognized as revenue and expense, acknowledge in Footnote #8 of the Financial Statements.

    If you subtract the value of the donated services, classified in management expenses, Charlotte Ballet actually decreased management expenses by nearly 60% from the prior year.

  • ProudlyUnaffiliated

    If I had power over this, I’d have the state of North Carolina tax the municipalities based on a head count and let them raise revenue anyway they wanted in order to pay that tax and do anything else they dang well pleased. And, of course, no, none, nada, zip,
    zero money would or could ever flow from the state to the municipalities. Money would be a one way trip — up the chain.