Local Politics

Voters Reject Transfer, Sales Taxes

Posted November 6, 2007 9:38 p.m. EST
Updated November 7, 2007 11:31 a.m. EST

— Growth-related taxes were soundly rejected Tuesday by voters in most area counties.

State lawmakers approved giving counties the option of imposing a new tax to address needs like more classroom space, improved roads or new water and sewer lines to accommodate growing populations.

Counties could impose a land transfer tax equal to 0.4 percent of the sale price whenever property changes hands or a 0.25-cent local sales tax, provided voters approved the measures.

Officials said the new taxes were needed to give them an option other than property tax increases to raise the revenue needed to expand infrastructure as more families moved in.

But voters didn't agree and turned down the referenda by wide margins, in most cases.

In the closest votes, Cumberland County voters defeated a local sales tax by 52 to 48 percent, and Robeson County voters turned down the sales tax proposal by a 58 to 42 percent margin.

Meanwhile, the transfer tax was defeated 93-7 percent in Harnett County, 85-15 percent in Hoke County, 84-16 percent in Johnston County, 77-23 percent in Moore County and 70-30 percent in Chatham County.

"I think this sends a very strong message that the public feels this isn't a fair means of taxation," said Tim Kent, executive vice president of the North Carolina Association of Realtors. "(This is) clearly a victory for homeowners and housing affordability in this state."

Voters in Johnston and Harnett counties also defeated sales tax proposals by more than four-to-one margins.

Sampson County was the only area county to approve a tax Tuesday, as more than 77 percent of voters passed a local sales tax.

Realtors and home builders waged a fierce advertising and lobbying campaign against the transfer tax in the General Assembly, saying it would drive up home prices. Lower-key efforts targeted counties putting the question on the ballot this fall.

The local sales tax proposal didn't generate nearly as much heat, either in the General Assembly or in area counties.

Kent said he hopes the results make other counties think twice about placing a transfer tax on the ballot in the future, especially with the slowdown in the housing market.

"The timing is horrendous right now to be placing another tax on home ownership," he said.

But Wake Up Wake County, a group that advocates for better growth management, said a transfer tax would raise about $50 million a year to help the county address needs brought on by booming growth. The group plans to lobby community organizations in the coming months to support a transfer tax in Wake County next year.

"It helps growth pay for growth," said Stan Norwalk, vice chairman of the group.