Local Politics

Durham County Eyes New Tax Options

Posted August 6, 2007 6:53 p.m. EDT

— A week after state lawmakers approved a budget giving counties the option of imposing a local sales tax or a real estate transfer tax, Durham County officials decided Monday to start gauging public opinion on whether to adopt either levy.

"We're clearly behind the eight-ball here, and the property tax is just getting squeezed," County Manager Mike Ruffin said.

Durham Public Schools, for example, needs an estimated $500 million in upgrades over the next 10 years to keep up with added enrollment.

Property tax revenue isn't providing enough money to handle local growth, Ruffin said. He said the best way to get ahead of the curve is to adopt a quarter-cent sales tax increase or a transfer tax equal to 0.4 percent of the sale price of a home.

A local sales tax would bring an extra $9.8 million to Durham County in the first year and more than $106 million over the next 10 years, he said. A transfer tax would bring in $11.6 million the first year and more than $156 million by 2017, he said.

"If my numbers are correct, (a tax increase) would service $154 (million) of $197 million dollars worth of school debt. That means no tax rate increase except for the difference," he said.

The county will began polling local residents this week, and officials expect to have results of the survey by Aug. 24. A public hearing on the taxes, which would have to be approved by a voter referendum in November, is scheduled for next Monday night.

Some members of the county Board of Commissioners said they worry that either tax option would hit low-income people the hardest.

"I really want to make sure we're sensitive to our citizens who really experience hardships," Commissioner Michael Paige said.