Charlotte City Council uneasy over proposed sales tax

08/08/2014 5:49 PM

08/09/2014 5:53 PM

The Democratic majority on the Mecklenburg Board of County Commissioners has voted to place a quarter-cent sales tax on the November ballot, but Democrats on the Charlotte City Council are lukewarm about the idea, worried it could jeopardize the city’s own fall bond vote.

Council members have not discussed the issue during a meeting, and in public statements have been supportive of teachers, libraries and the arts.

But there is unease about the impact to the city’s bond vote, as well as any future sales tax increase the city might seek for transit or other needs.

“I am always concerned about driving up the cost of living for people in Charlotte,” said at-large council member Michael Barnes, a Democrat. “While I support ... increasing teacher pay, I think that we have to find as many options as possible that don’t impact families in Charlotte.”

He said he has not talked to any council members who are enthusiastic about the sales tax referendum.

The Charlotte Chamber historically raises money for an ad campaign for city bond referendums, and it plans to do so again this fall. In 2007, the chamber campaigned in favor of keeping the county’s half-cent sales tax for mass transit against a repeal effort.

The chamber this week released a statement that said it didn’t oppose or support the tax proposal.

If passed, 80 percent of the new tax revenues would go to raise pay of Charlotte-Mecklenburg Schools employees; 7.5 percent would go to pay raises at Central Piedmont Community College and another 7.5 percent to the Arts & Science Council. The public library system would get the remaining 5 percent.

Chamber spokeswoman Natalie Dick said the group needs more discussion with county leaders before it stakes a position on the referendum. She said Mecklenburg County commissioners didn’t consult or inform the chamber before they voted 5-4 in June to put the referendum on the ballot.

It’s unclear whether some council members’ hesitancy about the issue would have any impact on whether the tax would pass. Council members aren’t up for re-election until 2015, though they will be at public events, likely urging residents to vote for the bonds.

At-large council member Vi Lyles, a Democrat, said she thinks the needs in the sales tax proposal are the “right ones.”

When asked by the Observer whether she would be urging people to vote for the sales tax increase, Lyles said she hadn’t thought about the issue before.

“My reluctance to comment is not because of the need, but the process is something (the City Council and county commission) have to do together,” she said. “We have to decide that together not separately.”

In 2013, the City Council approved a $816 million capital improvement plan, which will build roads, sidewalks, bridges, affordable housing, and police and fire stations through 2020. Much of the plan must be approved by voters in a number referendums.

The first bond package is $110.97 million for roads; $20 million for neighborhood improvements; $15 million for housing.

Voters have historically approved bonds. Some council members are worried that any sales tax backlash could encourage more people to vote against the bonds as well.

Council members also say privately that the county’s proposal could make it difficult, if not impossible, to secure future sales tax increases for city needs.

Last year, the city proposed increasing the prepared food and beverage tax by a penny to fund stadium improvements for the Carolina Panthers. The General Assembly rejected that idea.

If the city ever revisited that idea, and the county tax were approved, the sales tax on prepared food would be 9.5 percent, up from 8.25 percent today.

The city has also floated the idea that a sales tax increase would be needed to finish building the projects in the 2030 transit plan, which would include rail to Lake Norman, a streetcar and rapid transit on Independence Boulevard.

The county sales tax increase, along with a new half-cent transit tax, would push the general sales tax to 8 percent.

A new transit tax has only been discussed as a possibility for far in the future, and no formal action has been taken.

Democrat David Howard, an at-large council member, was asked about his opinion of the county’s decision to place the sales tax increase on the November ballot. He only said he’s “sensitive” to the county’s financial needs, and said schools is a critical issue.

Republican Ed Driggs said he doesn’t support the proposal.

“The situation has been muddied by the 7 percent raise of teacher pay (recently approved by the General Assembly),” he said. “Do we still need the sales tax?”

Democratic council member Al Austin is enthusiastic about the sales tax increase.

“I am pleased – this is what our country is about. People get to make a choice,” Austin said. “Our community has said teachers are important. This is a chance for people to vote on it.”

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