SALISBURY — County commissioners will wait to decide on a proposal for a sales tax increase and property tax decrease until their next meeting.
The Rowan County Board of Commissioners voted Tuesday to delay consideration of the plan until Feb. 4, so that they have time to get more information.
Vice Chairman Craig Pierce has proposed a sales tax increase of 1 cent per dollar, and a quarter of it would be reserved for capital projects like buildings and equipment.
Tied in with the sales tax increase would be a property tax decrease of between 2 and 4 cents per $100 valuation. Pierce suggested starting with a smaller decrease and gradually adding to it.
Commissioners talked about the plan at Tuesday’s budget session as well as the regular meeting that followed, but Pierce didn’t propose it as part of the next year’s budget.
He said the board would need to act soon in order to request a local bill from Rowan’s legislative delegation, get approval for the sales tax from the N.C. General Assembly and place the item on the November ballot.
“The voters will make the decision about whether or not it’s going to happen,” said Commissioner Jon Barber, who added that he supports Pierce’s plan.
Pierce said he wants to develop a capital improvement fund for the county so that it can pay for large projects as they come up without delaying them or borrowing money. This could help it take care of pressing needs like new EMS stations in the eastern and western parts of the county, he said.
“The reason we are approaching this with a sales tax solution as opposed to a property tax is that a majority of residents in Rowan County are not property owners,” Pierce said. “In a current estimation - we don’t have an exact figure - 42 percent of residents of Rowan County are actually property owners.”
Pierce said that according to the county tax administrator, there are about 78,500 parcels in the county under 52,000 tax accounts. He took about 10 percent off that number to represent an estimate of property owners with multiple accounts.
About 113,000 of Rowan County’s 143,000 residents are over the age of 18, Pierce said. That means an estimated 42 percent of adults own property in the county.
Pierce said the 1-cent sales tax increase would be shared with the county’s municipalities, meaning that they would have money to pay for their own capital needs - and possibly lower their own property tax rates.
Pierce said calculations from Finance Director Leslie Heidrick show that the county could net $75,000 by reducing property taxes by 4 cents.
The current property tax rate is 62.25 cents per $100 valuation. The county’s sales tax rate is 7 percent, including the 4.75 percent state rate and the county’s voter-approved 0.25-cent sales tax for a new 911 center, radio telecommunications upgrades and satellite jail.
Chairman Jim Sides said he’s not sure if he’ll vote for it, but he likes the idea and wants to take time to learn more about it. He said he appreciates that it spreads the tax burden fairly among county residents and that voters would have the final say.
One wrench in the plan, commissioners said, could be the state’s own tax reform efforts. Chad Mitchell cautioned that if state legislators decide to expand the sales tax base to include services, 1 cent could equal a lot more revenue for the county - and a much larger burden on taxpayers.
But even if reform does happen on the state level, he said, it will likely take a while to implement. Mitchell said Pierce’s proposal is worth looking at in the meantime.
Commissioner Mike Caskey was the only board member to speak against the plan, saying he doesn’t want any tax increases in this economy.
“I said I wasn’t going to raise taxes, so I won’t support this,” Caskey said. “But I think it’s put together well, and I see what you’re trying to do with it.”