A quarter percent increase in the sales tax does not sound like a big burden ó 2 and a half cents on a $10 purchase, as one county commissioner likes to point out. But Rowan County commissioners should make sure the improvements funded through the tax increase outweigh the expense to people who can afford it the least.
They can start by making sure food is exempt from the increase, if that’s possible.
With a recession raging, commissioners are focusing on a tax whose revenues are hardly on the upswing. According to the Center on Budget and Policy Priorities, after adjustment for inflation, sales tax revenues are down in 35 of 39 states. Still, the sales tax brings in considerable sums, and County Manager Gary Page estimates a quarter-cent increase would net the county $2 million to $2.5 million.
Two million dollars does not go far when commissioners are considering an $8 million jail complex and $12 million in cell towers and radios for upgraded fire-services communications. But it could be enough money to make payments on a loan for those improvements. And if taxpayers don’t like paying for jails, certainly they understand the importance of providing firefighters up-to-date radios.
The money is needed, but what about people who are struggling to get by? They can hardly afford a tax increase when they’re scraping to get together money to put food on the table. The answer for them may be to exempt groceries ó food to be prepared at home ó from the increase.
North Carolina is one of the few states that exempts food from the state sales tax, which is 4.25 percent, but not the local sales tax, which is 2.5 percent. A quarter-cent increase to that local tax will bring the total sales tax here to an even 7 cents. In households where every penny counts, that could make a small difference. Local governments usually exempt food if food is exempt at the state level. The exceptions include localities in Arizona, Colorado, Georgia, Louisiana and North Carolina.
So that’s a consideration. Commissioners have also considered that increasing the sales tax to the same level as many other counties is less dramatic than hiking the property tax. The county has enough people facing foreclosure to realize home ownership is no guarantee of wealth.
These are challenging times for government, business and individuals. The recession has hurt income and revenue all around. But county government must maintain essential services at an acceptable level in boom times and downturns. The current detention center is inadequate ó the state is breathing down the county’s neck on this ó and it’s in the wrong place. As for the radios and cell towers, a small increase in the sales tax is a small price to pay to properly equip people who put their lives on the line to protect others. These are vital services.