A tax hike for Charlotte’s arts? There’s one big glitch

The arts help make Charlotte a vibrant, attractive city. The Arts & Science Council seeks dedicated tax money.
The arts help make Charlotte a vibrant, attractive city. The Arts & Science Council seeks dedicated tax money. dtfoster@charlotteobserver.com

In 2013, Charlotte’s City Council considered pulling a fast one on taxpayers. The Carolina Panthers wanted $125 million from the city to renovate Bank of America stadium. The council responded with a plan to double the sales tax on restaurant food and beverages. One problem: That would have brought in close to $1 billion, or $875 million more than the Panthers needed.

We were reminded of that this week when Mecklenburg County commissioners heard a proposal to enact a new quarter-cent sales tax for the arts. The Arts & Science Council is struggling and wants a dedicated tax that would generate $20 million a year for arts, culture and history.

One problem (at least): The quarter-cent sales tax would bring in $50 million-plus a year, not $20 million. The other $30 million? Commissioners could spend that on whatever they pleased. That makes us a bit queasy.

This differs from the Panthers fiasco because Mecklenburg commissioners’ hands are a bit tied: State law lets the county ask voters for a quarter-cent sales tax but not any other size – like, say, an eighth-cent, which would bring in an amount much closer to what the arts community seeks.

It’s similar, though, in that taxpayers would be coughing up two and a half times what’s actually needed to fund the initiative that’s driving the tax hike.

We believe arts and culture are vitally important to building great cities. Besides directly boosting the quality of life, they play an important role in economic development by making the city attractive to businesses considering moving here.

And there’s no question the Arts & Science Council is hurting, which trickles down to individual arts groups. The ASC’s workplace-giving campaign once brought in close to $8 million a year. Now it collects about $2 million.

So what to do? Arts advocates are backing the sales tax, which voters would decide in a referendum this November, because Mecklenburg already has permission from the legislature. Other options — such as a hotel-motel tax, a rental car tax or a cigarette tax — would require legislative permission, a dicey proposition. A property tax hike would also be an option, albeit an unpopular one.

There is a better approach, one that would help the city and comfort taxpayers who worry about giving commissioners a $30 million annual slush fund. Hold the referendum on the quarter-cent sales tax with a commitment to allocate the money for both the arts and affordable housing. The latter is one of the most daunting challenges facing Charlotte, and the former plays a vital role in keeping Charlotte a vibrant city. Committing some of the tax revenue for the less fortunate is especially appropriate since the sales tax is regressive.

Our proposal: $15 million for the arts (which more closely matches the ASC’s best years) and $35 million for affordable housing. There are other deserving needs, of course, with mass transit being one of the more pressing. The important thing is to specifically and publicly dedicate all $50 million. By law it would be nonbinding, but it would help ensure the money is spent wisely and would better hold commissioners accountable.