Gang of Five votes to raise sales tax if referendum passes
Property taxes would be capped and reduced by the amount of the sales tax
January 10, 2012
The Beaufort County Board of Commissioners voted Monday night (1-9-12) to submit a referendum to the county's voters in the May 8, 2012 primary on the question of whether to raise the county, local option sales tax rate from 2% to 2.25%. That tax will be on top of the State Sales Tax of 4.75% would produce a total sales tax in Beaufort County of 7%. Eighteen of the state's 100 counties assess 7% while Mecklenburg assesses 7.25%. All the others are 6.75%. Of the surrounding counties, Pitt and Martin currently have a 7% rate while Pamlico, Craven, Washington and Hyde have 6.75% rates. Click here to review the tax rates effective January 1, 2012.
The state sales tax rate was recently reduced from 5.75% to 4.75% effective July 1, 2011. The higher rate had been in effect since 9-1-09.
The vote was the typical 5-2 on such issues: The Gang of Five (Cayton, Langley and Booth; all Democrats being joined by two Republicans Jay McRoy and Al Klemm) voted for the tax increase and Richardson and Deatherage voted "no."
While the action Monday night was primarily to ask the Board of Elections to put the referendum on the May primary ballot, it was based on the FY 2012 county budget resolution. That action raised the county property tax rate from $.50 to $.53 cents per $100 of property value. At the time, the resolution said that a referendum would be held in May and if the increase in sales tax passes the property tax rate for FY 2013 (next year) would be reduced commensurate with the amount of sales tax revenue projected from the additional $.0025.
Assistant County Manager Jim Chrisman projects that if the increase in the sales tax passes it would produce approximately $800,000. If that becomes true then the property tax rate would consequently be reduced about $.015. So if your county property tax bill this year was about $1000 on $189,000 in property you would get a decrease of approximately $30.00 (in round numbers) and if you spent $12,000 for taxable items in 2012-13 you would break even. If your consumption of taxable items were more than $12,000, you would see a tax increase under this scheme.
Under this arrangement presumably the tax rate for FY 2013 would be effectively capped at $.53 and the actual rate would be some amount less than $.53 cents depending on how much money the quarter of a percent increase in the sales tax would produce.
The question then becomes: What happens in subsequent years. It is impossible to determine that from either the motions approved or the discussion. Presumably the property tax rate would remain capped at $.53 cents as long as the sales tax was at $.07 or higher. Otherwise the quid pro quo the board is offering the voters would be meaningless after FY 2013.
Listen to the discussion and the motions and see if you can tell what they did:
The next clip is simply a continuation of the first:
We will have additional information and commentary on the board's action shortly. Check back for more.
We wonder about the legality of this action. Listen to the video carefully and see if you can discern from any of the motions that were voted on the amount of the proposed sales tax or when it would become effective. But even more troubling, there is nothing in the motion that actually says the property tax will be reduced or by how much. While it is alluded to in some of the discussion it was not included in the actual motions that passed.
So what did each of these seven commissioners vote on? Under normal legal interpretation the determination is made by looking at the wording of the actual motion(s). Typically for something this important the action is based on a formal resolution which is explicit enough that a reasonable person reading the plain meaning of the language within the four corners of the resolution can determine precisely what action was taken. It is totally illegitimate for an interpretation to be based on the off the cuff comments of certain members of the board or body voting. And even worse, what the voter will be voting on when they mark their ballots. Perhaps, like Congress, they "deem" it passed a certain way. But that is a poor way to do the public's business.
One might respond by saying "that's just a technicality." But it is not just a technicality. The most significant thing they have left totally ambiguous is the question of subsequent years. If they raise the property tax rate above $.53 in future years we think a good argument can be made that the sales tax must be reduced, simply because failure to do so would violate the plain meaning of the motion they adopted. That plain meaning is that the amount of one tax is determined by the other.