Macon County votes ‘no’ on quarter-cent sales tax
Decisions about following through with the new Franklin High School project were always going to fall to a new board of commissioners made up of different members than those who occupied the seats when plans were first initiated.
However, with Macon County residents voting no to the quarter-cent sales tax referendum, the county may have to rely completely on increased property taxes if the new high school and other capital projects are to come to fruition.
“The people have spoken,” said incoming Republican Commissioner John Shearl, who won the race to represent district two. “They did not approve of a tax increase.”
The referendum asked voters whether they wanted county government to implement an additional quarter-cent sales tax on all items sold in Macon County other than unprepared food and gas. This would have raised the sales tax from 6.75 to 7 cents per dollar, impacting out-of-towners and locals alike. All additional revenue from the increase would have stayed in Macon County for use on the school system’s capital projects. It was estimated to generate over $2 million in annual revenues.
“As superintendent, I have a neutral opinion of the recent failure of the quarter-cent sales tax referendum in Macon County,” said Superintendent Dr. Chris Baldwin. “As a lifelong Macon County resident and adult taxpayer, I am disappointed that the referendum failed. The sales tax potentially would have led to lower Macon County ad-valorem taxes in the future.”
The tax referendum proposal came about earlier this year when Macon County commissioners began planning for a new Franklin High School. The project may come in over $100 million. In their discussions about funding, commissioners saw that if they implemented the optional sales tax increase, it would offset the need for a property tax increase of about 2 cents.
“The questions is, how do you pay for it?” said Commission Chairman Jim Tate during a March 8 board of commissioners meeting. “Would you rather pay for it with an increase of property taxes, or would you rather pay for it by letting some of our visitors who pass through this county also help pay for it through a quarter-cent sales tax increase.”
In North Carolina, all counties have the option to locally levy a quarter-cent sales tax. According to the legislation, the sales tax can be implemented on the first day of any calendar quarter as long as the county gives the N.C. Department of Revenue at least 90 days advance notice. If a referendum is held in November during the General Election and passes, the earliest a county could begin collecting the revenue would be April 1 of the following year, provided it adopts a resolution levying the tax and forwards it to the Department of Revenue prior to December 31.
- Here’s a look at Franklin High School as it currently sits. A new school will likely be built in that spot and may run upward of $100 million. File photo
If the referendum fails, a county can legally hold a subsequent referendum on the same question after one year. For Commissioner Gary Shields, a retired life-long educator, this might be an option for Macon County.
“I still feel there is hope in two years when the commissioner board has the opportunity to put the quarter-cent sales tax back on the ballot,” said Shields. “This was the first for our county and we now have two years to learn from what we/I should have done better to educate our populace.”
The sales tax is not restricted and can be used for any allowed use by a county. However, the board of commissioners can adopt a resolution that stipulates how they plan to use the revenues.
“The sales tax, as stated in the resolution passed by the Macon County Board of Commissioners, would have gone towards funding capital projects for the Macon County School System,” said County Manager Derek Roland.
Out of 15,903 ballots cast on Election Day in Macon County, 15,124 people voted on the referendum to implement the quarter-cent sales tax; 8,575 (or 55%) voted against the measure, 6,829 (or 45%) voted in favor. The number of voters participating in the referendum decision is consistent with the number of people who voted on referenda on the ballot during 2018 midterm elections which also hovered just over 15,000. The population of Macon County is about 37,000.
The makeup of the Macon County Board of Commissioners, responsible for both approving funding of capital projects for the school system and property tax increases for the county, is set to change at the end of this year.
During the November election, Republicans John Shearl and Danny Antoine both won seats on the board of commissioners. Shearl will replace Jim Tate to represent district one; Tate did not seek re-election, but Shearl beat independent candidate Jerry Moore. Danny Antoine beat incumbent Democrat Ronnie Beale to represent district two; Beale has been on the board since 2006. Antoine and Shearl will join Shields, Joshua Young and Paul Higdon on the board.
There are several capital projects ongoing in the Macon County School system right now, of which the new high school is only one. At its last joint meeting with the Macon County School Board, the Board of Commissioners approved several capital project fund requests. One of the larger projects, and one that has yet to be fully funded, is the Highlands School pre-K and expansion project. This would involve renovation of the elementary building to add pre-K classroom space and expansion of the middle school buildings to accommodate needs for CTE classrooms and improve the media center.
The estimated cost of the project is approximately $4.7 million. At its October meeting, the county approved entering into contract negotiations with LS3P for architectural services. This decision was made by a 3-2 vote with both county commissioners and school board members. Commissioners Paul Higdon and Joshua Young voted against the measure and questioned the timing of the decision to move forward with a project that was not outlined in the school board’s capital outlay request earlier in the year.
At the commissioners’ Nov. 8 meeting, the board approved $329,255 for architectural services.
“The expansion of Highlands School will be beneficial to the entire community by improving access to pre-school childcare in Highlands,” said Baldwin. “The renovations associated with the Highlands project are also necessary and will lead to improved instruction.”
In addition to improvements at Highlands School, the new board will have to make decisions about whether or not to move forward with the new high school project and if so, how to fund it without revenue from the local sales tax option.
“Based upon financial projections provided by Davenport, Macon County’s Financial Advisor, in July of 2022 the sales tax would have generated additional revenue equal to the amount generated by an ad-valorem property tax increase of approximately 2 cents,” said Roland. “This particular scenario assumed an up-front tax increase in 2024, to fund the estimated $118.4 million project, including the main campus and athletic facility. With the sales tax passage, the ad-valorem tax increase required under this scenario was estimated at 5.91 cents. Without passage of the sales tax under this scenario, the required ad-valorem tax increase was estimated at 7.83 cents.”
- This architectural rendering shows an overhead look at what Franklin’s new high school may look like. File photo
Commissioner Paul Higdon was in favor of letting voters decide on the sales tax option, but said that his personal opinion on the issue didn’t matter as much as that of the voters.
“We have to honor our constituents’ choices,” said Higdon. “I have a pretty strong stance on taxes. My philosophy is that the government has enough money, we just need to be better stewards of it.”
And while Higdon would like to see a new high school in Franklin, he says it’s not that simple.
“We have got to have some adult conversations about funding and financing,” said Higdon. “This thing has turned into a political, emotional topic. I’m for any improvements, not only for education, but to services provided to the citizens of Macon County. But behind all that is, how do we fund it? What effect will it have financially on the citizens?”
Higdon is staunchly against raising property taxes by 7.8 cents, the amount needed to fund the new high school without revenue from the local sales tax option, especially, he says, in economic conditions like these. Two viable options for Higdon are looking at other funding sources that may be available to the county and changing the scope of the project so it costs less.
However, Commissioner Shields noted that data from the Franklin High School Facility Assessment indicates that a renovation of the existing campus would not be in the best interest of the county due to the cost of renovating and re-coding each building, making them safer and ADA-compliant and the need to find other instruction space while renovations take place.
“The renovations of the current facility are not cost effective and would not effectively address the ADA and security concerns,” said Baldwin. “Therefore, the funding required to build a new high school is not going to be avoidable. Furthermore, additional delays in the project will likely lead to increased costs which will be transferred to the taxpayers of Macon County.”
The new members of the Macon County Commission will take office in December. While voters voted against the local sales tax option, they will not have a say if commissioners raise property taxes to fund capital projects for the school system or any other necessary county business. Property tax changes are approved by the county commission when they approve the budget each year, usually in June or July.
“Anytime the county is viewing this type of expense a lot of soul searching has to take place with the commissioner board and the citizens of Macon County,” said Shields. “The property tax increase of 8 cents to finance this project could have been approximately 2 cents less if we had passed the quarter-cent sales tax. What the public and commissioner board have to come to terms with is, what is the option if a new high school is not built?”
Commissioner Joshua Young and incoming commissioner Danny Antoine could not be reached for comment.
Leave a comment
Whether as a sales tax, or a property tax, doesn't matter. It is paid by the same people that are already overtaxed to pay for some politician's dream. Once the taxes are raised, they never go away because there is always something else government lusts after.