Commissioners approve sales tax referendum
06/17/2014 11:36 PM
06/18/2014 12:32 PM
Mecklenburg County commissioners adopted a $1.5 billion budget Tuesday that excludes money for across-the-board pay raises for Charlotte-Mecklenburg Schools employees. But in a separate action they narrowly approved adding a referendum to the November ballot that could supplement those salaries.
The referendum, approved by a 5-4 vote, proposes a quarter-of-a-penny boost to the county’s sales tax that could generate up to $35 million each year. Now it will be go before voters in November.
With the referendum came a resolution stating how commissioners intended to divvy up the added revenue: 80 percent would go to raise CMS salaries, 7.5 percent to supplement salaries at Central Piedmont Community College employees. Another 7.5 percent would go to support the Arts & Science Council and the remaining 5 percent to the public library system.
The five votes to pass the referendum came from five of the board’s six Democrats. Commissioner Pat Cotham was the only Democrat to vote against the proposal, siding with the three Republicans.
The budget that passed Tuesday holds the property tax rate steady and increases CMS’s funding by $26.8 million over the current budget. It also provides $7.3 million to bump up salaries of county-funded CMS employees by at least 2 percent. The county plans to match whatever pay raise state lawmakers give all teachers.
The CMS appropriation funds everything the district requested, except for $19.4 million for a 3-percent raise for all the district’s employees. Yet if the sales tax levy generates $35 million, that would mean about $28 million would go for CMS employee supplements, said board Vice Chair Dumont Clarke, who introduced the referendum proposal with Chair Trevor Fuller.
That could mean about a 4-percent raise for CMS employees, Clarke said.
If the referendum passed, the county wouldn’t begin collecting on the levy until April 2015, so the added revenues likely wouldn’t be used until the 2015-16 fiscal year.
The increase would not be “a one-time deal,” Clarke said. “The county’s educational infrastructure – CMS, charter schools and CPCC – could steadily give some increase out of this source of revenue.”
It would be a sustainable source of funding for teacher pay raises, hopefully stemming the tide of teachers leaving CMS for other districts or states – or getting out of the profession, Fuller said.
“I’ve heard no proposal put forward to meet that need,” Fuller said in an interview. “Most agree we need to properly compensate teachers in Mecklenburg County. If that’s the case, we’ve put forward a source of funding that is sustainable and that would do the job.”
Dissenters speak out
Cotham and commissioner Karen Bentley, a Republican, said raising the sales tax would hurt the poor and middle class.
“They are the ones who spend most of their income on the things we are now considering taxing more,” Cotham read in a statement. “They are the ones who will most immediately bear the increased tax burden.”
Republican commissioner Bill James said the resolution isn’t binding, and a future board could use the money for something other than teacher pay raises.
Fuller and Clarke agreed but said the resolution defines the current board’s intent for how the money will be used.
“A future of board of commissioners could change the purpose, but they would have to change this board’s policy,” Fuller said. “They cannot simply not use it for teacher salaries – they have to change the policy.”
Success of the referendum in November is not a certainty.
In 2007, state legislators gave counties the ability to levy a quarter-cent sales tax, but it must be approved by voters in a referendum. Since then, of the 92 referendums introduced in 59 counties, 27 were approved, according to the N.C. Association of County Commissioners.
Of the ones approved, at least 20 counties have used the revenues for education-related needs, said association spokesman Todd McGee. “But it’s usually for helping build schools, or construction needs, not for raising teacher pay,” McGee said.
‘We have more needs’
Mecklenburg’s sales tax, currently at 7.25 percent, is one of the state’s highest because of the special half-cent sales tax for mass transit that’s been levied since the late 1990s and is dedicated to the Charlotte Area Transit System.
There also is a special countywide penny sales tax on prepared food and beverages and a tax on hotel and motel rooms. Both fund tourism.
“I don’t like it that we’re at the top in the state in terms of sales tax rates,” Fuller said. “But we are at the top because we have more needs. It takes more to fulfill those needs.”
The Mecklenburg referendum, which wouldn’t collect a tax on food, won’t specify what the added revenue will be used for, Fuller said. But the board’s resolution specifies that it will go to CMS, CPCC, Arts and Science and libraries.
“We can also advertise that the resolution will be used for that purpose,” Fuller said in an interview.
Republican commissioner Matthew Ridenhour said the revenue generated from the sales tax would depend on economic health. But Fuller, Clarke and Democrat George Dunlap said the sale tax is a reliable source of revenue.
“Except when we experienced the worst financial collapse in 75 years,” Clarke said. “Historically, sales revenues have grown over time year over year. They don’t get bounced up and down.”
Staff Writer Steve Harrison contributed.
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