Some county and state leaders have indicated theyíll continue pushing for a bill that would allow a local referendum on reinstating a penny sales tax the legislature allowed to expire this year. Voters should keep an open mind on it, too.
Anti-tax hardliners will oppose the idea on doctrinaire grounds, while others argue that sales taxes impose a regressive burden on lower-income residents. Fact is that sales taxes spread the revenue burden more broadly than other taxes. Those who consume more pay more. County officials also have said that the $8 million or so generated by the one-cent tax would enable them to drop a quarter-cent sales tax Rowan already imposes, so the real impact on purchases would be three-quarters of a cent, rather than a full penny.
County commissioners supported such a referendum earlier this year, for placement on ballots this fall. But it requires state legislative action, and this yearís session expired before Rowan County officials and legislators could work out questions about how the proceeds would be used. Rep. Fred Steen has indicated the legislation could be revived in next springís short session.
A key sticking point in getting enabling legislation through the General Assembly is how the revenue from the additional penny might be spent. State legislators want details; local officials want some leeway on allocating option-tax revenues. However, Commission Vice Chairman Carl Ford offered a good indication of where those extra dollars would go: property tax relief and education funding, both potentially powerful selling points.
Itís reasonable for state legislators to require a general idea of how local option revenues would be spent, but they shouldnít attempt to micromanage budgeting decisions best left to local officials. As Ford says, ěweíve got to have income from somewhere.î In a rapidly changing economy, local officials also need flexibility in deciding where the countyís greatest needs lie.
A 1-cent local option tax is neither a perfect nor a permanent solution for creating stable revenue streams. As various task forces and government panels have repeatedly pointed out, the longterm solution lies in tax reform at the state level that broadens the tax base while lowering rates and simplifying the tax code. But that can keeps getting kicked down the road. Meanwhile, Rowan County should at least have a chance to determine this part of its sales-tax future. State legislators should let this proposal move forward, and then let Rowan voters decide.