The ship of state’s detour into deficit-infested waters has forced open a slight opportunity for counties seeking more tax options. If they can get the public behind them, the counties might squeak a local option sales tax increase through that opening.
They should go for it.
The Rowan County Commissioners and their peers have been trying for years to get more taxing authority, but to no avail. In the early ’90s spirit of Newt Gingrich’s Contract with America, Republicans and Democrats in the legislature touted the mantra of “no new taxes.”That meant no new state taxes. And it meant no additional taxing authority for local governments, who were left to rely mainly on property taxes.
That was then. This is now. And the Gingrich-era promise hangs around the state’s neck like an albatross. The philosophy was easy to embrace when money was flowing in faster than the state could spend it, but now lawmakers are looking at a $800-million-plus shortfall for this year and they can see similar storm clouds on the near horizon. It’s time to adjust course.
Lawmakers are looking at a variety of tax increases. Some of it they call “loophole closing,” but a tax is a tax. Targets range from long-distance service to cable and satellite television and beer and wine. Though Senate President Pro Tem Marc Basnight still mouthed the no-new-tax pledge early in this session —“I’m more interested in looking for ways to cut spending and making efforts to improve government efficiency,” he said —winds are shifting and the state appears headed for some type of multi-faceted tax increase.
Giving counties the option to raise the sales tax is a logical part of that plan. The mushrooming residential growth that many counties have experienced has not been paying for itself. New families put increased pressures on schools and social services, but the property taxes they pay don’t cover the costs. A 1-cent sales tax increase would raise about $8 million a year here, with the county and each of the 10 municipalities getting a share.
The state could end its reimbursements to counties —for everything from the inventory tax to the Homestead Exemption —and the counties would still come out ahead, if they could increase the sales tax by a penny. Meeting the Rowan-Salisbury Schools’ $60-million-plus in building needs would look more like a possibility and less like an impossible dream.
Eighty of the state’s 100 counties support a local-option sales tax. In its absence, many of them have had to approve property-tax increases for the coming year. Sooner or later, the General Assembly needs to heed this call. If lawmakers change tax course to accommodate shifting state revenues, they should do the same for the counties. The same winds blow all across the state, not just in Raleigh.
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