Wake Weighs Putting Local Sales Tax on Ballot

Raleigh, N.C. — Wake County officials plan to meet in the coming weeks to discuss the possibility of putting a local-option sales tax on the ballot later in the year.

The quarter-cent sales tax was one of two revenue options state lawmakers included in last year's budget to help counties deal with growth-related needs like new schools, better roads and more water and sewer lines.

Eight counties put the sales tax on the November ballot, and voters in five counties – Sampson, Pitt, Catawba, Martin, and Surry – approved the measure.  Meanwhile, voters in all 16 counties that considered a tax on real estate sales soundly defeated the proposals.

The sales tax could generate about $32 million a year in added revenue for Wake County, while a land transfer tax could net the county $49 million a year, officials said.

Wake County commissioners first need to determine how to use any additional revenue – schools, roads or something else – before deciding which tax to pursue and asking voters for their approval, County Manager David Cooke said

"What we've done is watch what other counties have done," Cooke said. "Once we identify what needs are there, then we can go to the community and say, 'Here are your choices, and here's how we can pay for these needs.'"

Board of Commissioners Chairman Joe Bryan said he believes the tax debate requires more discussion before it requires action.

"Neither the sales tax or the land transfer tax answer everything," Bryan said. "That's just one additional tool to build infrastructure or keep your tax rate as low as possible."

The North Carolina Association of County Commissioners estimates at least 20 counties will ask voters for the sales tax hike in 2008.

"I think a sales tax probably has a better chance than a real estate transfer tax, simply because it's broad-based," political consultant Brad Crone said.

Next year is probably the best time to put any tax referendum on the ballot, Crone said, noting it would fall between the $900 million school bond approved in 2006 and another possible school bond issue on the 2009 ballot.

"From a political calendar standpoint, you've got to look at passing it in 2008 when voters go to the polls because of voter fatigue with that many issues," he said.

But Bryan said asking people next fall to raise the local sales tax might be too much in a short time.

"I don't think the public is quite ready for that, personally," he said.