Local News

Wake Officials: Schools Lost $600,000 in Tax Savings

Posted April 21, 2008 6:12 p.m. EDT
Updated April 21, 2008 8:30 p.m. EDT

— Wake County school system officials have lost almost $616,000 in sales tax savings by delaying the transfer of school deeds to the county, officials said Monday.

North Carolina school districts aren't exempt from state sales tax, so local officials agreed two years ago to shift ownership of schools to the county, which is tax-exempt and could purchase construction materials and everyday supplies like paper while saving the 6.75 percent sales tax.

In a recent memo to commissioners, County Manager David Cooke said the district has been so slow in handing over the deeds to the schools that $615,981 in tax savings has been lost.

"This is a significant amount of money, and it's money we will not ever get back," Commissioner Tony Gurley said.

Gurley said the transfer was a condition of the $900 million school construction bond issue approved by voters in 2006 and that the district and the Board of Commissioners need to work together more "to earn the confidence and respect of the public."

District officials dispute Cooke's math, saying only $70,000 in sales tax savings has been lost because of delayed property transfers. Seventy-four deeds were transferred between last August and the end of March, but 17 others identified by officials last year haven't yet been shifted.

Don Haydon, the district's chief facilities and operations officer, said the school system is investigating the dispute.

"We've asked our attorney to work with the staff to address these issues and expect a response shortly," Haydon said.

Board of Commissioners Chairman Joe Bryan called the discrepancy unacceptable, but said it is a symptom of a broken state system.

"All 100 counties across North Carolina have to go through this convoluted way of getting sales tax back. What's happening is our legislators are allowing our state budget to be balanced on the back of our students," Bryan said.