HomeMy WebLinkAboutAgenda - 03-15-2011- 6aGRANGE CGUNTY
BOARD OF COMMISSiGNERS
AGTi~N AGENDA ITEM ABSTRACT
Meeting Date: March 15, 2011
Action Agenda
item No. (o ° Q
SUBJECT: Public Hearing. on Possible November 8, 2011 Special Advisory Referendum
Concernin the Lev of acne-Quarter Cent X114¢} Count Sales and Use Tax
DEPARTMENT: Manager & Financial Services PUBLIC HEARING: ~Y~N} Yes
ATTACHMENT(S):
Draft Resolution Scheduling a Special
Advisory Referendum Concerning the
Levy of aOne-Quarter Cent (1/4¢)
County Sales and Use Tax (For
Information Purposes Only)
North Carolina General Statute - One-
Quarter Cent (1/4¢) County Sales
and Use Tax
iNFQRMATi~N CONTACT:
Frank Clifton, County Manager, 245-2300
Clarence Grier, Financial Services
Director, 245-2453
Michael Talbert, Deputy Financial
Services Director, 245-2153
PURPOSE: To:
1} Conduct a public hearing to solicit comments from the public on a possible November 8,
2011 Special Advisory Referendum Concerning the Levy of acne-Quarter Cent X114¢}
County Sales and Use Tax;
2} Direct staff to place the attached Draft Resolution Scheduling a Special Advisory
Referendum Concerning the Levy of a one-Quarter Cent X114¢} County Sales and Use
Tax on the April 5, 2011 regular meeting agenda for Board action; and
3} In preparation for possible Board approval of the referendum resolution at the April 5,
2011 regular Board meeting, schedule and direct staff to move forward with public
notices for a publichearing at the same April 5, 2011 meeting on the possible uses for
the potential proceeds from the additional sales tax if approved by the voters.
BACKGRaUND~ Local governments in North Caralina have historically relied heavily upon ad
valorem property taxes as their mayor source of revenue. For a number of years, the Orange
County Board of County Commissioners, the North Carolina Association of County
Commissioners and many other local governing boards across the state lobbied the North
Caralina General Assembly for legislative authority to expand counties' revenue options,
thereby lessening counties' reliance an property taxes.
During the 2007 legislative session, the North Carolina General Assembly granted county
boards of commissioners the authori#y to levy, subject to voter approval, an additional one-
quarter cent X114¢} county sales and use tax. As authorized by the General Assembly, the new
sales tax cannot apply to consumer food purchases. There is also no legislative requirement,
or mechanism, for counties to share the additional one-quarter cent sales tax with
municipalities.
Between November 7, 2007 and December 31, 2010, ?'? referendums an the quarter-cent sales
tax have been held in 53 counties. Gf those 7~, 18 were approved and 59 failed This year one
referendum has been held to date and the quarter-cent sales tax was approved in Halifax
County on February 1, 2011. There is currently only one referendum scheduled for the
remainder of 2011 and itwill be held in Buncombe County on November 8, 2011.
A Special Advisory Referendum Concern"rng the Levy of a Gne-Quarter Gent X114¢} County
Sales and Use Tax was held in Orange County on November 2, 2010. The election results
were 20,896 votes cast FGR and 21,953 votes AGAINST an additional one-quarter cent X114¢}
county sales and use tax. The first possible date the Board can consider for a Special Advisory
Referendum Concerning the Levy of a Gne-Quarter Cent X114¢} County Sales and Use Tax
referendum, is November 8, 2011. North Carolina General Statutes 105-465 states that "The
county board of elections shall fix the date of the special election, except that the special
election shall not be held on the date or within 60 days of any biennial election of county
officers, nor within one year from the date from the date last preceding special election under
the section."
Although a public hearing is not required by the North Carolina Genera! Statutes or any other
provisions, the Board has determined that hearing from the public would provide the Board with
additional perspectives and assist the Board in the decision-making process. After the public
hearing, the Board can discuss the potential referendum as necessary and be in a better
position to make a decision on a passible November 2011 referendum.
It should be noted that, according to Board of Elections Director Tracy Reams, the Board of
Commissioners needs to make a decision on or before Au ust 23 2011 regarding a possible
November 8, 2011 one-quarter cent X114¢} county sales and use tax referendum in order to
provide the necessary time to fully prepare for the November election. This timeframe allows
for the coding and programming to include the referendum and appropriate time to print and
receive ballots. The Board of Elections is required to have absentee ballots on site and ready
to mail by September 19, 2011.
Attached as information only is a draft resolution calling for a special advisory referendum on
the November 8, 2011 ballot on the question of whether to levy the one-quarter percent county
sales and use tax in Grange County. The draft referendum resolution is rovided for reference
ur oses onl and the Board is not bein asked to consider the resolution at this meetin .
As detailed in the draft resolution, the November 8, 2011 ballot question would ask Grange
County voters to vote for or against a local sales and use tax at the rate of one-quarter cent in
addition to all other state and local sales and use flax. It should be noted that the ballot question
cannot include language regarding proposed uses of the funds from the one-quarter cent tax. A
"sunset clause" can also not be included on the ballot question. Any action to subsequently
sunset an implemented sales and use tax would require additional Board action. A November
8, 2011 ballotquestion would appearas follows:
[ ]FOR [ ]AGAINST
County Sales and Use Tax
Local sales and use tax at the rate
of one-quarter percent (0.25%) in
addition to all other State and
local sales and use taxes.
The attached draft referendum resolution does not include language regarding the possible
uses of the potential funds from the one-quarter cent sales tax.
It is proposed that the Board consider action on the attached referendum resolution at its April
5, 201 ~ regular meeting. [t is also ,proposed, in preparation for passible Board approval of the
referendum resolution at the April 5, 2011 regular Board meeting, that the Baard schedule a
public hearing for that same meeting on the possible uses for the potential proceeds from the
additional sales tax if approved by the voters. The Board could then discuss the possible uses
far the potential funds at either its April 7 or April 12 work session and be prepared to act at the
Board's April 19, 2011 regular meeting on a second resolution regarding the planned uses of
the potential sales tax funds.
Pending approval of the attached referendum resolution, the Board may also want to consider
discussing any public education efforts to ensure voters are knowledgeable regarding the ballot
question. The North Carolina Association of County Commissioners recommends that counties
undertake a public education campaign to educate voters. The County did undertake a public
education effort for the previous November 2010 sales tax referendum. It is proposed that a
potential public education effort be considered for discussion at either the April 7 or April 12
Board work session and Board action as appropriate be considered at the April 19, 2011 regular
meeting,
If the Board of Commissioners does decide to move forward with a referendum and a majority
of voters approve the sales tax referendum, the Board will be required to give ten X10} days
public notice of the Board's intent to levy the tax. The Baard would then hold a required public
hearing and consider a new resolution to actually levy the tax. The Board must adopt that
additional resolution in order for the tax to take effect. Based on election certification
timeframes, the Board of Commissioners' regular meeting schedule, and timing and other
requirements associated with the North Carolina Department of Revenue and North Carolina
General Statute 105-466, the earliest date the additional sales tax could became effective
following a November S, 2011 referendum would be April 1, 2012.
FINANCIAL IMPACT: There is no financial impact associated with conducting a public hearing
to solicit comments from the public on a possible November 8, 2011 Special Advisory
Referendum Concerning the Levy ofaOngi-Quarter Gent X114¢} County Sales and Use Tax,
if a majority of voters approve the sales tax, and the Board of Commissioners implements the
sales tax as soon after the November S, 2011 referendum as possible, it could have an
effective date of April 1, 2012. Approximately $625,000 would be generated during the
remainderllast quarter of FY 2011-12. As an additional revenue source in the following years,
the sales and use tax would generate approximately $2,500,000 annually for the County.
4
RECO~IMENDATION~S~R The Manager recommends the Board:
1 } Conduct a public hearing to solicit comments from the public on a possible November 8,
2011 Special Advisory Referendum Concerning the Levy of a Une-Quarter Cent ~114~}
County Sales and Use Tax;
2} Direct staff to place the attached Draft Resolution Scheduling a Special Advisory
Referendum Concerning the Levy of a Une-Quarter Gent ~114~} County Sales and Use
Tax on the April 5, 2011 regular meeting agenda for Board action; and
3} In preparation for possible Board approval of the referendum resolution at the April 5,
2011 regular Board meeting, schedule and direct staff to move forward with public
notices for a public hearing at the same April 5, 2011 meeting on the possible uses for
the potential proceeds from the additional sales tax if approved by the voters.
Based on approval of the above, staff will begin planning for 1} Board discussion at either the
April ? orApri! 12 work session on the possible uses of the potential sales tax funds; 2} potential
Board action at the April 19, 2011 regular meeting on a second resolution regarding the planned
uses of the potential sales tax funds; and 3} Board discussion and action on a potential public
education effort.
R~.~ - ao(1 - 0~5
DRAFT -For Information Only 5
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION CALLING FOR A NOVEMBER 8, 2011 SPECIAL ADVISORY
REFERENDUM CONCERNING THE LEVY OF AONE-QUARTER CENT (1/4¢)
COUNTY SALES AND USE TAX
WHEREAS, the North Carolina Genera[ Assembly has enacted the "one-C~uarter
Cent X114¢} County Sales and Use Tax Act," Arkicle 46 of Chapter 105 of the
North Carolina Genera[ Statutes Session Law 200?-323}, which authorizes
counties to levy a local sales and use tax; and
WHEREAS, in order to levy the local sales and use tax, the County of grange
must conduct an advisory referendum in accordance with the provisions of the
North Carolina General Statutes Section 163-287;
NOW, THEREFGRE, BE IT RESOLVED by the Orange County Board of
Commissioners that:
Section 1: In accordance with the North Carolina General Statutes, a special
advisory referendum is hereby called to be held between the normal time the
palls are open on Tuesday, November 8, 2011, at which there shall be submitted
to the qualified voters of the County of grange the question set forkh in Section 3
of this Resolution.
Section 2: The Qrange County Board of Elections shall conduct said
Referendum.
Section 3: The ballot question shall be in the following form:
[ ]FOR [ ]AGAINST
Local sales and use tax at the rate of one-quarter percent (0.25%) in addition
to all other State and local sales and use taxes.
Section 4: The Clerk to the Board of Commissioners is authorized and directed to
transmit a certified copy of this Resolution to the Grange County Board of
Elections within three ~3} days after the passage hereof.
Section 5: The Board of Elections shall publish legal notice of the special
advisory referendum in accordance with North Carolina General Statutes Section
163-287.
Section 6: This Resolution shall take effect upon its passage.
ADGPTED this the day of , 2011.
V
Article q~5.
Cne~~uar~ex Cent ~1~~~~ County ~a~es and use Tax,
§ ~.v5=535, Sham title, .
Th~.s Article is the Cne~~uaxtex Cent ~11~4~} County dales and tlse Tax 1~ct.
~~QQ7~~~3, s. ~ l r 17~b~r~
§ 1v5~53~. Limitatxousr
T.~s A.r~icle applies only to counties that levy the first onewcent ~~ ~~ sales and use tax
underr .ArtiGle~39 of this Chapter oar, under Chapter ~D~~ of the 1967 Session Laws, the ,
~trst one-half cent ~~12~~ local s~.es and use tax undex Article ~D of this Chapter, and the
. seeond~ one--half cent ~~12¢~ local sales and use tax undex Article 42 of this Chapter.
~2~Q~~323, s. 31,17~b~.~ ~ .
~ ~.U5~537, bevy.
~a~ Authority, -- If the majorzty of those voting in a refexendum held pursuant to
` this ,t4rticle vote for the levy of the taxi the board of county commissionexs may, by
. ,.........._...._~_.~___~__.__. xesaxu.~o~..~.~aud_af~er-~-Q~days`_ ~ublic_notice,_.le~ a_Io.Gal_sale~_an~d use ta~.~a~ a ra~~~~~f :.~..~..~~...,...~...~_____~
one-quarter percent ~Q*2S°~~}. ~ ~ .
~~ .~ Vote, -~ The beard of county cvn~missianers may direct the county board of
elections to conduct au. advisory referendum: an the ques~.on of whethex to levy a Iocal
sales and use tax ~. the county as provided in this .Article. The election shah be held an a
date jointly agreed upon by the hoard of county ca,~.ssianexs and the board of elections
'and shall be held ~. accordance with the, pxoaedures of Gr.S. ~~~-287.
~c~ Bauat question. -~ The fox, of the question tv be presented an a. bauot for a
. ~ special election cQnce~.g the Ievy of the tax authaxi2ed by this Article shall be:
. ~ r~~ ~ Ft~~ ~ ~ .AGAINST ~ '
Local sales and use tax at the rate of one-quarter percent X0.25°fo~ in addition
. to all other Mate and local sales and ,use taxes, ~'
(d.~ Li~~.txon. ~- A tax levxe~ under this Art~Gle m.ay not be in effect in a aunty
' at. the same tune as a tax levied undex Article ~Q of this Cha~tex. ~20D7~323, sr 31.17~b}.~
' ~ ~ ~,va~538, Ad~nistxa~rvn al' ta~es~ ~ ~ .
laxce~t a.s provided in this Article; the adoption, levy, cvuection, ad~.uustra~,on, and
xe~eal of t~.ese additional taxes must be in accvrda:~:ce v~th Article ~9 of this Chaptex.
G, S, l Q5-4~ 8. ~ is au a ' 'stxative ~ravisian that applies to this Article. A tax levied
. under this Article does not apply to the sales price of food that xs exempt from tax
pursuant' to ~CrS. ~Q5w~~4.131~ or to the sales price of abundled tranSaCtion taxable
pursuantt to Cr.Sr 1a5~~d7~a~~5a~. The Secretary Shall dot divide the amount allocated tU a
county between the county and the n~u~.cip~ties within. the county, ~~QQ7~~23, s.
3~r~ I ~b~~ ~~V~~~~5~ ti?r .1~.5~CL~~ ~~Ll~~~~~' l7r ~5~ ~~~~~-155 U- ~~r~