Early Tax Payers Won’t Get As Big A Discount

BY WESLEY YOUNG
SALISBURY POST

The early bird still gets the tax discount in Rowan County.

It just won’t be as much.

Monday, Rowan County commissioners voted to reduce the discount it pays to people who pay their county taxes early, but scrapped the notion of doing away with the discount altogether.

The discount for July will drop from 2 percent to 1.5 percent, and for August will drop from 1.5 to 1 percent.

Commissioners put the discount in place to encourage taxpayers to pay early. And they do: stats show the county collects almost 40 percent of its tax revenue in those two months.

But with interest rates so low, County Manager Tim Russell and Finance Director Leslie Earnhardt say the county is losing money by giving taxpayers a discount at the current rate.

In essence, the amount of interest the county can collect by getting the money early has become less than the amount the county loses by giving the discount.

For fiscal year 1997, Earnhardt said, the county lost $6,200 because of the discount policy.

County administrators had thought about dropping the tax discount altogether, but that no longer appears practical. Russell told the board that the county doesn’t have a large enough fund balance to stand the sudden loss of revenue that dropping the discount would cause.

Other counties in the area have been doing away with the discount or dropping it, Earnhardt told commissioners in a memo. Cabarrus County ended the discount in 1993. Davidson County offered discounts like Rowan’s until three years ago, when the board there dropped the rate to a lower level.

Iredell County has never had a discount at all. But Earnhardt said that if Rowan County drops the discount, it will only collect 10 percent of its annual revenue during July and August.

‘‘Because of the fund balance, the cash flow does help us,’’ Russell told commissioners. ‘‘We benefit by offering a discount.’’

But Commissioner Dave Rowland said taxpayers aren’t making a good financial decision to pay the tax early and get the discount, since they can make more money by paying later, and earning interest in he meantime.

‘‘You don’t save squat by paying early,’’ Rowland said. ‘‘I can make more for my money than 2 percent.’’