HomeMy WebLinkAboutAgenda - 02-05-2008-5dORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 5, 2008
Action Agenda.
Item No.
SUBJECT: Public Hearing on Local Revenue Options Referendum
DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) Yes
ATTACHMENT(S):
None
INFORMATION CONTACT:
Laura Blackmon or Rod Visser, 919-245-
2300
PURPOSE: To conduct a public hearing to solicit opinion from voters regarding which of two
local revenue options should be placed on a May 2008 referendum for voter consideration.
BACKGROUND: As part of a comprehensive and complicated "swap" of county and state
revenue sources approved by the North Carolina General Assembly during its 2007 Session,
the legislature authorized county Boards of Commissioners to enact one of two new local
revenue sources, subject to voter approval in each county considering implementation of the
new revenue source. Counties may conduct a referendum on:
• a land transfer tax (up to a rate of four-tenths percent [0.4%], in increments of one-tenth
percent [0.1 %]);
• a one-quarter cent additional sales tax (this option is available only to counties that levy
the first one-cent sales tax [Article 39], the first one-half cent sales tax [Article 40], AND
the second one-half cent sales tax [Article 42] - Orange County meets this condition); or
• both taxes.
County Boards of Commissioners can implement only one of the two taxes if voters approve
both.
The Orange County Commissioners decided in Fall 2007 that there was inadequate time to
properly inform voters about the available local revenue options for there to be a November
2007 referendum on the subject. However, the Board did indicate its intent to hold a May 2008
referendum on one or both revenue options. Although there is no statutory requirement for a
governing board to hold a public hearing ahead of such a referendum, the BOCC's timeline
since last fall has contemplated that the Board would conduct a public hearing on the matter
prior to deciding what question to place on the May 2008 ballot.
The form of the ballot language that would appear for each of the revenue options is specified in
the State statute, as follows:
[ ] 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.
2
[ ] FOR [ ] AGAINST
Real property transfer tax at the rate of up to [x] percent [x%] of value or consideration.
(NOTE: The x in the brackets above would be replaced on the ballot by .1, .2, .3, or .4,
depending on the decision of the Board of County Commissioners).
FINANCIAL IMPACT: There is no financial impact directly associated with the public hearing.
Preliminary estimates provided by the North Carolina Association of County Commissioners
suggest that based on historical patterns, Orange County could expect additional annual sales
tax revenue of roughly $3.0 million, or annual proceeds of approximately $4.0 million from a land
transfer tax of .4 percent, if approved by voters and implemented by the Board of
Commissioners.
RECOMMENDATION(S): The Manager recommends that the Board conduct the public
hearing on the matter of which local revenue option, or both, to place on the ballot for a May 6,
2008 referendum.