Politics & Government

Commissioners likely to back a vote on sales tax increase. But where would the money go?

Mecklenburg County Commissioners Chairman George Dunlap has publicly supported a proposal to put a quarter-cent sales tax increase to help fund the arts on the ballot in November. But Commissioner Pat Cotham and some other commissioners have objected to the idea.
Mecklenburg County Commissioners Chairman George Dunlap has publicly supported a proposal to put a quarter-cent sales tax increase to help fund the arts on the ballot in November. But Commissioner Pat Cotham and some other commissioners have objected to the idea.

Mecklenburg County commissioners are expected to vote Tuesday to give residents the chance to vote on whether to add a quarter cent to the sales tax, but they’re divided on how $50 million a year would be used if it’s approved.

The original proposal would have provided nearly half the money to the Arts and Science Council, an organization that distributes donations to local arts groups. But some commissioners are backing another option that would give the most money to parks.

On Tuesday, the Board of Commissioners will decide whether to put the quarter-cent sales tax increase referendum on the Nov. 6 ballot.

The proposal has ignited passionate debate about the county’s spending priorities.

Without more public money, a coalition of prominent arts, nonprofit and business executives say the future of arts and cultural programs in Charlotte and surrounding towns is in jeopardy.

Robert Bush, the outgoing president of the Arts and Science Council, which distributes money to local groups and could get an estimated $24.5 million a year from the tax increase, said corporate giving has nosedived since the Great Recession — leaving his organization struggling to figure out how to pay for basic operation costs and expanded programming demanded by the community.

“The hardest dollars to raise are the ones that keep the doors open,” Bush said.

Robert Bush Jr.
Robert Bush, former president of the Arts And Science Council, says that the group is asking for more taxpayer money because corporate giving has dropped sharply since the Great Recession. John D. Simmons jsimmons@charlotteobserver.com

In February, ASC Chair Valecia McDowell told the Observer that the local arts sector had approached a “crisis point.”

From 2005 to 2008, the ASC received $16 million or more annually. But in 2009, total revenue fell to $12 million and has not returned to pre-recession levels.

The result is that ASC grants to local arts groups have fallen from $13.2 million in 2008 to $6.8 million last year, according to the Observer report in February.

But opponents say it is irresponsible and elitist to create a permanent funding source for museums, theaters and other culture in a community struggling with a lack of affordable housing, racial inequality and a public park system ranked among the lowest in the nation.

“I have been listening to community input for more than 30 years and I have never heard arts and culture listed as a top priority,” Commissioner Elaine Powell said.

Two plans

In public meetings and interviews, a majority of the nine county commissioners have voiced support for putting a referendum on the ballot despite some misgivings.

Four commissioners told the Observer on Friday that they believe the proposal will receive enough votes to pass.

But board members are divided over dueling proposals for how to spend the money if voters approve the tax increase.

If passed, both plans would bump up sales tax on every eligible purchase within the county by a quarter-cent per dollar, generating an estimated $50 million per year.

That means that a $20 purchase would cost a consumer 5 cents more, Commissioner Chair George Dunlap has said.

The Arts and Science Council is Charlotte’s designated arts and culture agency, funded mostly with private donations and local tax dollars to support museums, educational programs and individual artists.

Under one proposal, the ASC would receive $24.5 million annually. The rest of the money would be spent at the county’s discretion. Officials have said they would put $15 million toward developing greenways and an additional $8 million toward arts and culture education.

In recent days, Powell lobbied for a counter-proposal.

Under that plan, the biggest share of the money — $21 million a year or about 42% of the total — would support parks and greenways. About $20 million would go to the Arts and Science Council, and the remainder would be targeted for education and mental health resources for schoolchildren.

Powell said if officials ask voters for higher taxes, parks and greenways deserve the lion’s share of the money. The county parks are suffering with about $1 billion in needed repairs and infrastructure improvements, she said.

Three commissioners said they would support a compromise between the two plans.

Commissioner Susan Rodriguez-McDowell said the issue has riled constituents on both sides. She said someone sent officials a picture of a person living on the street and wrote: “Why don’t you help him?”

Rodriguez-McDowell said she is leaning toward putting the counter-proposal on the ballot to let voters decide the issue.

Commissioner Mark Jerrell said he likely won’t support the original proposal for the tax increase.

Jerrell said he wants to make sure money would benefit people in lower-income neighborhoods, where the education programs are needed most urgently. He also said he wants to ensure the county can provide oversight of the money.

“This is about accountability,” Jerrell said.

But even if voters approve the tax increase, there is no guarantee how the money will be spent.

Under North Carolina law, local governments can spend sales tax dollars however they choose, said Gerry Cohen, a member of the Wake County Board of Elections and a former special counsel to the North Carolina General Assembly.

“They could turn around use it to fund light rail to Ballantyne,” Cohen said. “There is not a legal requirement. It’s a political question.”

At a recent meeting, Commissioner Trevor Fuller questioned whether it is appropriate to ask voters for more money and then to transfer it to a privately run organization whose leaders are not elected by the public.

Other commissioners agreed, but said they would settle that issue after they decide whether to put a referendum on the ballot.

Bush, the outgoing Arts and Science Council leader, said his group is open to making reforms that would allow the public to see how money is spent.

“We are willing to be covered by the Sunshine law,” said Bush, referring to state laws that make information about government spending available to the public.

But when the Observer recently asked for salary information for incoming president R. Jeep Bryant, the Arts and Science Council refused. A spokesperson would only say that it would be comparable to recent years when Bush received total compensation between roughly $219,000 and $251,000 annually.

According to a 2016 community survey, 76% of Mecklenburg County residents said greenways were the park and recreation amenity most needed by the county. Eva Ellenburg eellenburg@charlotteobserver.com

Who pays? Who benefits?

Private individual giving has long been the largest source of revenue for arts organizations.

But Dana Michael Harsell, a professor of political science and public administration at the University of North Dakota, said it’s common for arts organizations to receive public money through sales taxes or direct budget appropriations from local governments.

If voters approve new taxes, “the community could begin to see the increased programming,” Harsell said. “As funding increases, I think you’ll see a number of other (arts) organizations stepping in to compete for that funding.”

Places such as Denver, San Francisco and Cuyahoga County, Ohio, impose taxes to pay for the arts.

In Mecklenburg, the ASC’s funding comes from a mix of private donations — around $10 million per year — and money from the city, county and state. Mecklenburg County provides about $2 million a year and the city of Charlotte gives $3.2 million.

With corporate donations drying up in recent years, the council says it is getting more difficult to financially support more than 100 sponsored organizations.

Commissioner Vilma Leake said she is opposed to the sales tax increase because residents in her west Charlotte district — which is largely minority and poor — would pay a larger share of their income than more affluent residents but do not benefit from ballet, high art and other offerings that would be subsidized.

“My district is not the recipient of the services,” Leake said. “Who will pay for this?”

Bush and other ASC officials disagree.

In recent years, Bush said the organization has launched an effort to cap investment to major players in the arts scene and attempted to provide support to emerging cultural groups that appear to reflect the region’s growing population and diversity.

Bush said the group is trying to eliminate barriers to participation in cultural experiences though its new Culture Blocks program, which targets demographic groups and neighborhoods that have historically low levels of participation with ASC-supported programs, including African-Americans, Latinos and others.