Latest

Quarter-cent sales tax spending options expanded

Quarter-cent sales tax spending options expanded

Macon County Commissioners already decided that the quarter-cent sales tax referendum would be back on the ballot this November, but at its May 14 meeting, the board expanded the opportunities for how that money can be spent if voters approve the measure. 

“Sales tax is the fairest tax there is, if there’s such a thing,” said Commissioner John Shearl.

When the Macon County Commission began its budget process earlier this year, commissioners raised the issue of the quarter-cent sales tax, which is estimated to generate about $2.4 million for the county annually.

“If we get the quarter-cent, we could essentially drop our mill rate by two mills,” said Commissioner Josh Young at the time. “I think it’s a strong point to make to the people that we could collect funds from pass-through revenue and offset our local mill rate by two cents and keep all our CIP [capital improvement plan] fully funded.” 

When commissioners first approved the quarter-cent sales tax in March for inclusion on the November ballot, the stated use of any income from the sales tax was for “capital projects of the Macon County School System.” 

However, when Chairman Gary Shields brought the topic up again during the commissioner’s May meeting, it was suggested to change the intended use of income from the tax to “operating expenses” in the school system.

Related Items

Diedre Breeden was present at the meeting and said the school board was in support of the change.

Chairman Shields serves on the Business Advisory Council and said that they were going to start a marketing campaign for the quarter-cent sales tax.

“We’re going to do everything to make it work this time,” Shields said. “Last time it didn’t make it but we’re going to work hard this time to market it in such a manner that the public will understand their role in securing more [funds] for the Macon County schools.” 

According to Shields, changing the use of future revenues from capital to operating expenses was part of this marketing strategy. Members of the Business Advisory Council in support of the sales tax did not want the $62 million state grant  the county received for the new high school project to be a deterrent to people voting for the new sales tax that had previously been intended for use on the same project.

“The rhyme and reason behind that, to leave the word capital out of it is because it could turn out to be a negative as people are voting and saying, ‘well, we’ve got enough money out there now you’ve got $62 million,’” Shields said. “We don’t want that to interfere with what we’re trying to do here with the quarter-cent sales tax.” 

However, Commissioner Josh Young argued to change the referendum so that any revenues from the sales tax could be used on both capital and operating expenses in the school system. He noted that while the county did receive a large grant for the high school, the project will still cost over $100 million in total. In addition, the school system also has ongoing capital projects at the Highlands School, the Nantahala School with the sewer treatment plant, the middle shcool track and geological surveying for the Highlands soccer field. There are also needs in the near future for a new East Franklin Elementary School, which is overcrowded and has several maintenance needs.

“$62 million goes a long way, but there’s $200 million in capital needs,” said Young.

If approved, the quarter-cent sales tax would apply to anyone purchasing goods in Macon County — residents, as well as visitors — and would apply to all items other than unprepared food and gas.

In North Carolina, all counties have the option to 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 Dec. 31.

On a motion made by Young, the commission unanimously approved changing the referendum for the quarter-cent sales tax to allow for use of revenues in both capital and operational needs in the school system.

Smokey Mountain News Logo
SUPPORT THE SMOKY MOUNTAIN NEWS AND
INDEPENDENT, AWARD-WINNING JOURNALISM
Go to top
Payment Information

/

At our inception 20 years ago, we chose to be different. Unlike other news organizations, we made the decision to provide in-depth, regional reporting free to anyone who wanted access to it. We don’t plan to change that model. Support from our readers will help us maintain and strengthen the editorial independence that is crucial to our mission to help make Western North Carolina a better place to call home. If you are able, please support The Smoky Mountain News.

The Smoky Mountain News is a wholly private corporation. Reader contributions support the journalistic mission of SMN to remain independent. Your support of SMN does not constitute a charitable donation. If you have a question about contributing to SMN, please contact us.