HomeMy WebLinkAboutAgenda - 04-05-2011 - 7bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 5, 2011
Action Agenda
Item No.
SUBJECT: Public Hearing to Consider Proposed Uses of Possible Funds from a
November 8, 2011 Special Advisory Referendum Concerning the Levy of a
One-Quarter Cent (1/4¢) County Sales and Use Tax
DEPARTMENT: Manager & Financial Services PUBLIC HEARING: ~Y~N~ Yes
ATTACHMENT(S):
Attachment 1: Draft Resolution
Regarding Uses of
Potential Revenues from
a One-Quarter Cent
(1/4¢) County Sales and
Use Tax (For
Information Only)
Attachment 2: North Carolina General
Statute -Article 46 Gne-
QuarterCent County
Sales and Use Tax
INFORMATION CONTACT:
Frank Clifton, County Manager,
245-2300
Clarence Grier, Financial Services,
X919} 245-2453
Michael Talberfi, Financial Services,
X919} 245-2153
PURPOSE: To hold a public hearing on potential uses for a Gne-Quarter Cent X114¢} County
additional Sales and Use Tax.
BACKGROUND: Local governments in North Carolina have historically relied heavily upon ad
valorem property taxes as their major source of revenue. For a number of years, the Grange
County Board of County Commissioners, the North Carolina Association of County
Commissioners and many other local governing boards across the state lobbied the North
Carolina General Assembly for legislative authority to expand counties' revenue options,
thereby lessening counties' reliance on property taxes.
During the 200?' legislative session, the North Carolina General Assembly granted county
boards of commissioners the authority to levy, subject to voter approval, an additional one-
quarter cent X114¢} county sales and use tax referred to as the Article 46 sales and use tax. As
authorized by the General Assembly, the Article 46 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, 77 referendums on the quarter-cent sales
tax have been held in 53 counties, Gf those 71,18 were approved and 59 failed. This year one
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referendum has been held to date and the quarter-cent sales tax was approved in Halifax
County an February 1, 2011. There are two referendums scheduled for the remainder of 2011
Cabarrus County is scheduled for May 17, 2011 and Buncombe County is scheduled for
November 8, 2011.
A Special Advisory Referendum Concerning the Levy of a Gne-Quarter Cent X114¢} County
Sales and Use Tax was held in Grange 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 nvt 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 General Statutes, the Board
held a public hearing on March 15, 2011 to solicit comments from the public on a possible
November 8, 2011 Special Advisory Referendum Concerning the Levy of a Gne-Quarter cent
X114¢} County Sales and Use Tax. After the public hearing, the Board discussed the potential
referendum and directed staff to place a Resolution Calling for a Special Advisory Referendum
Concerning the Levy of a Gne-Quarter cent X114¢} County Sales and Use Tax on the April 5,
2011 meeting. The Board considered that resolution earlier during tonight's meeting.
The Board also directed staff, at the March 15t" meeting, to schedule a public hearin at the
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April 5, 2011 meeting on the possible uses for the potential proceeds from the additional sales
tax if approved by voters. liver the past few months the Board has discussed both Education
and Economic Development as having a high priority when considering potential uses for
revenues generated from the One-Quarter cent X114¢} Gounty Sales and Use Tax. A longterm
commitment of ten years has also been discussed.
Pending approval afthe referendum resolution concerning the Levy ofaone-Quarter Cent X114}
County Sales and Use Tax, the .Board may also want to consider discussing any public
education efforks 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 the April 7 Board work session and Board
action as appropriate be considered atthe April 19, 2011 regular meeting.
If 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 Board 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 Gommissioners' 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 become effective
following a Novernber8, 2411 referendum would be April 1, 2012.
FINANCIAL IMPACT: There is no financial impact associated with holding a public hearing on
potential uses for aOne-Quarter Cent (1/4¢) County Sales and Use Tax.
If a majority of voters approve the sales tax, and the Board of Commissioners implements the
sales flax as soon after the November 8, 2011 referendum as possible, it could have an
effective date of April 1, 2012. Approximately $025,000 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 $2,500,400 annually for the County.
RECOMMENDATION(S): The Manager recommends the Board:
1) Hold the public hearing on potential uses for funds from aOne-Quarter
Cent (1/4¢) County additional Sales and Use Tax;
2} Review and discuss proposed uses of the potential sales tax revenues;
3} Provide any direction to staff in preparation for the Board's further
discussion of potential uses for funds at the Board's April 7~~ work session;
and
4} Provide direction to staff on next steps in preparation for Board discussion
at the April ?'~~ work session on any public education efforts to ensure
voters are knowledgeable regarding the ballot question.
RES- ao[1- p33
ForlnformaBon Only DRAFT q-µ~.c.hme~n-{- 1
ORANGE COUNTY BOARD OF COMMISSIONERS
A Resolution Regarding Uses of Potential Revenues
from aOne-Quarter Cent (1/4¢) County Sales and Use Tax
WHEREAS, there are significant pressing infrastructure, economic development, school, and
other County capital needs that are precipitated by growth pressures and the new economic
reality facing Crange County; and
WHEREAS, it is important to provide Crange County taxpayers with alternatives to the
pressure to raise property taxes to address these and other County needs; and
WHEREAS, the levy of a Article 46 one~quarter cent X114¢} County sales and use tax would
provide a new County revenue source and would generate approximately $2,546,6ga
annually for the County; and
WHEREAS, it is important for orange County to plan for future economic development that
will enable the County to recruit, retain, grow, and generate businesses and jobs that .are
desirable; and
WHEREAS, it is important that Crange County expand collaboration and cooperation of
economic development efforts and decisions between Crange County and the towns of
Chapel Hill, Carrboro and Hillsborough and the cities of Mebane and Durham; and
WHEREAS, it is important for Orange County to meet public school needs; and
WHEREAS, the Board of Commissioners establishes a 1 b year commitment to allocate
Article 46 one-quarter cent (1/4¢) County sales and use tax proceeds as follows:
a, 50°/0 of the funding will be allocated in an equitable manner between the County's two
school systems far the dedicated purpose of facility improvements at `older' schools
within all of Crange County and the procurement of technology. Each school system
will establish a list of prioritized needs for older schools within the County. Funding
provided by the passage. of the referendum will be allocated to those prioritized
projects. Progress gill be evaluated annually and adjustments made according to
needs agreed upon by the School Boards and Board of County Commissioners;
b. 50°/a of the funding will be allocated to fund infrastructure improvements needed far
economic development initiatives that recruit new businesses, expand existing
businesses, provides funding for small business loans to grow businesses in Crange
County;
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WHEREAS, if additional funding does not come from the one-quarter cent X114¢} County
sales and use tax, the property tax will be the primary funding source available for schools
and economic development initiatives;
For Information Only D 1~/1FT
WHEREAS, to distinguish and separate the revenues produced by this ~/ cent sales tax if
approved by Orange County voters, a Special Revenue Fund will be established to receive
and account for the sales tax revenue. These funds will remain separate from the county's
genera[ fund to allow for more accurate tracking of revenues and expenditures in accordance
with initial five year allocation plan established as part of this resolution;
NOW, THEREFORE, BE 1T RESOLVED THAT the Orange County Board of Commissioners
hereby states its intent to use the revenues from the Article 46 one-quarter cent ~114~}
County sales and use tax, if approved by the voters of Orange County, for currently unfunded
or underfunded economic development and public school capital needs far a period of ten
years, with a scheduled implementation date of April 1, 2012.
BE IT FURTHER RESOLVED THAT proceeds from the one-quarter cent (1/4¢) County sales
and use tax in later years will be used to address priorities as established by the Board of
Commissioners in the County's Capital Investment Plan.
This the day of , X011.
Bernadette Pelissier, Chair
Orange County Board of Commissioners
~-~~~- a 5
Article 46.
One-Quarter Cent (1/4¢) County Sales and Use Tax.
§ 105-535. Short title.
This Article is the One-Quarter Cent (1/4¢) County Sales and Use Tax Act.
(2007-323, s. 31.17(b).)
§ 105-536. L~mrtatlons. .
This Article applies only to counties that levy the first one-cent ~~ ¢} sales and use tax
under Article 3 9 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the
first one-half cent X112¢} local sales and use tax under Article 40 of this Chapter, and the
second one-half cent X112¢} local sales and use tax under Article 42 of this Chapter.
X2007-323, s. 31.17~b}.}
~ 105-537. Levy.
~a} Authority. -~ ff the majority of those voting in a referendum held pursuant to
this Article vote for the levy of the tax, the board of county commissioners may, by
resolution and after 10 days' public notice, levy a local sales and use tax at a rate of
one-quarter percent X0.25%}.
fib} Vote. -The board of county cammissioners may direct the county board of
elections to conduct an advisory referendum on the question of whether to levy a local
sales and use tax in the county as provided in this Article. The election shall be held on a
date jointly agreed upon by the board of county commissioners and the board of elections
and shall be held in accordance with the procedures of G.S. 163-257.
~c} Ballet Question. -- The form of the question to be presented on a ballot for a
special election concerning the levy of the tax authorized by this Article shall be:
"~ ~ FGR ~ ~ AGAINST
Local sales and use tax at the rate of one-quaver percent X0.25%} in addition
to ail other State and local sales and use taxes."
~d} Limitation. - A tax levied under this Article may not be in effect in a county
at the same time as a tax levied under Article 60 of this Chapter. X2007-323, s. 31.17~b},}
~ 105-535. AdmluistratYOn of taxes.
Except as provided in this Article, the adoption, levy, collection, administration, and
repeal of these additional taxes must be in accordance with Article 39 of this Chapter.
G.S. 105-468.1 is an administrative provision that applies to this ,Article. A tax levied
under, this Article does not apply to the sales price of food that is exempt from tax
pursuant to G. S . 105-164.138 or to the sales price of a bundled transaction taxable
pursuant to G.S. 105-467~a}~5a}. The Secretary shall not divide the. amount allocated to a
county between the county and the municipalities within the county. X2007-323, s.
31.17~b}; 2007-345, s.14.5~a}; ZOOSw134, s. 75; 2009-445, s.1 S.}