Cabarrus County commissioners will hold a referendum this spring asking residents whether they support adding a 1/4-cent sales tax.
The possible tax increase was part of ongoing budget discussions that triggered commissioners to call for the referendum in May. The referendum also will ask to freeze county expenditures at the 2012 levels.
The county board is trying to set its spending plan for the next five years. If the referendum passes, it would generate about $3 million to $4 million in 2012 and be used to pay off school construction debt.
Plans include options with and without the quarter-cent tax hike, freezing spending levels until fiscal year 2012 and holding the current property tax rate at 63 cents. Another plan could raise the property tax rate from 63 cents to 68 cents in 2013 fiscal year, which commissioners say would create a revenue-neutral budget.
Board member Larry Burrage doesn't support any tax increases but said people should have the right to vote on increasing taxes or not.
"The only way people can affect the outcome is to get our and tell people to vote," he said.
The state legislature has already given counties the right to hold a referendum for a tax hike, but about 1 in 10 throughout the state approved it, said Burrage.
If the public does choose an increase, Burrage said a more logical increase is the sales tax.
"Everybody pays sales tax every time they buy anything in Cabarrus County," he said. "If they don't live here, they won't pay a property tax. Only the people that live here pay property tax and raising property taxes makes it harder for more people."
Commissioner Christopher Measmer is in favor of sales tax but only if it's used to help keep the property tax rate low.
"The likelihood of it passing is very low but, if it does pass, it's a good way for folks who are coming into Cabarrus County for our tourism, it's a good way to collect tax revenue from them. I just don't think the citizens can afford a tax increase of any sort in this economy. I think some of the other commissioners have a lot more hopeful outlook for the referendum."
Officials said upcoming property revaluations are expected to decrease property values, and the change could cause a $10 million decrease in property tax revenue collected at the current tax rate of 63-cents per $100 valuation. Without changes like the tax hike, commissioners would have to raise the rate as much as 5-cents to maintain the current level of property tax revenue collected.
Commissioner Chairman Jay White, Vice Chairman Liz Poole and commissioner Bob Carruth voted to have the referendum in May. Chris Measmer cast the only dissenting vote, noting it would be cheaper to hold the referendum during November elections. Commissioners also voted to freeze all expenditures at the 2012 level following debate over when to freeze the spending.