By Susan Dickson
Staff Writer
In the sea of political signs around town, orange ones without candidate names are popping up, asking voters to “support jobs and schools.â€
Funded by the Chapel Hill-Carrboro Chamber of Commerce and the Greater Chapel Hill Realtors Association, the Campaign for Jobs and Schools was recently formed in support of the quarter-cent sales tax on the ballot. According to chamber President Aaron Nelson, the campaign represents a coalition consisting of the chamber, the county, the Hillsborough/Orange Chamber of Commerce and both of the county’s school boards.
In its 2007 budget, the legislature gave counties the option of a quarter-cent sales-tax increase or a 0.4 percent land-transfer tax to help compensate for money taken away from counties when the responsibility for paying for Medicaid was turned over to the state. As a result of that budget, counties lost state-supplied school-construction money and some sales-tax revenue.
Orange County voters overwhelmingly rejected a transfer-tax referendum in May 2008.
If voters approve the sales-tax increase, the Orange County sales-tax rate, which would apply to all goods and services except food and medicine, will increase from 7.75 percent to 8 percent. According to County Manager Frank Clifton, the tax could generate $2.3 million annually, but only about $575,000 during the remainder of fiscal year 2010-11.
County officials have said the sales tax would serve as an alternative to property taxes, which make up more than 75 percent of the county’s total revenue.
Where the money would go
The Orange County Board of Commissioners voted in September to dedicate 42.5 percent of the funds to economic development, 42.5 percent to schools and 15 percent to be split between EMS and library services – if the tax is approved by voters. The funding allocation will expire after five years; the board has not determined how funds will be allocated after that.
According to the county, the portion of the funds that would be allocated to schools would be dedicated to facility improvements at older schools and the procurement of technology. Each school system would submit a list of prioritized needs for its older schools to the county.
The portion of the revenues allocated to economic-development efforts would fund infrastructure improvements needed to recruit new businesses and expand existing businesses; business loans and grants to grow businesses in the county; business-recruitment, retention and expansion efforts; and community branding and marketing, according to the county.
Support and opposition
Jack Garvey, the manager for the campaign, said he has heard little opposition to the referendum. Some of what he has heard has come from outside the county, from the John Locke Foundation, a conservative think tank based in Raleigh.
Joseph Colletti, director of health and fiscal policy studies at the foundation, said because the language in the referendum does not refer to how the county will spend sales-tax funds, there is no guarantee that the money would go to economic development and schools.
“Regardless of any promises that are being made … the voters aren’t being asked to vote on those promises, the voters are being asked to vote on a tax increase,†he said. “The commissioners aren’t bound by anything.â€
Colletti said that if the identified needs are so pressing, commissioners should have prioritized those needs in the past, adding, “This is also a bad time to be raising taxes on anybody.â€
The sales tax has been endorsed by the PTA Council of Chapel Hill-Carrboro City Schools and Orange County Justice United.
Nelson said most chamber members seem to be in support of the referendum, though he heard from two unhappy business owners after the chamber’s board of directors endorsed the sales tax.
“The shopper doesn’t make behavior changes based on this one quarter of 1 percent,†Nelson said. “We’re so used to sending our money outside of the county…. This [tax] captures a significant portion of visitors’ spending.â€