Wake Eyes Local Sales Tax for School Construction

Raleigh, N.C. — Wake County is considering placing a local-option sales tax on the November ballot to help pay for a growing list of school construction and renovation projects.

State lawmakers last year began allowing counties to seek voter approval for local sales taxes or land transfer taxes to pay for growth-related needs like new schools, expanded roads or more water and sewer lines.

County Manager David Cooke on Tuesday spelled out the benefits of dedicating the proceeds from a 0.25-cent sales tax to school building needs. The tax could raise $831 million to $990 million over the next 20 years, likely knocking 3 to 3.2 cents off the tax rate needed to pay for an estimated $11.7 billion in school construction costs, he said.

Wake County's Board of Commissioners supported the concept of a local tax for school and road needs even before the General Assembly approved the specific taxes, and board Chairman Joe Bryan said he still supports putting a local sales tax to a vote this fall.

"Sales tax is one of those sources of revenue, with a vote of the public, that would help us instead of having to look only at the property tax," Bryan said. "Over the next seven to eight years, the tax rate will go up 17 cents to just meet what has been approved in the past, unless we have other sources of revenue."

School bond issues totaling about $3 billion will likely appear on local ballots in the next decade, he said, and property tax rates will have to go up to pay off those bonds as well without other funding options, he said.

"If we don't address the problem now, it's only going to get worse in the future," Wake County resident Virginia Parker said. "We're going to have a bigger hole we've got to dig ourselves out of."

Michael Sanera, research director and policy analyst for the conservative John Locke Foundation, said Wake County should slash its budget more instead of looking to raise taxes.

"With an economic downturn, an increase in taxes is not good," Sanera said.

If commissioners approve a sales tax referendum, Bryan said, the county will need to conduct a public campaign to sell the idea to voters.

Five of 16 counties approved sales tax referenda last fall, and 19 other counties have sales tax proposals on their ballots this May, including Cumberland, Edgecombe, Lee, Moore, Nash, Wayne and Wilson counties.